Solving Empirical Bioeconomic Models: A Rangeland Management Application

Abstract

AbstractAn empirical bioeconomic model was developed for private ranches conducting firewood, cattle, and hunting enterprises on California's hardwood rangelands. Hunting, forage, cattle, and oak firewood production functions were derived. Nonlinear optimal control was used to solve for two state and four control variables to give optimal time pathways for oak density and cattle stocking. Risk was considered through use of chance constraints, rainfall variability, and price expectations. Commercial hunting is shown to be the dominant economic value on these rangelands. Inclusion of stochastics shifts production away from cattle to less risky firewood and hunting enterprises.