Farm forestry investment in Ireland under uncertainty

Emily Wiemers, Jasmina Behan

Research output: Contribution to journalArticle

9 Scopus citations

Abstract

This paper develops a model to explain farmers' decision to move from agricultural activities to forestry. Farmers in Ireland have strong links with land and are reluctant to enter into forestry even when the returns from it exceed those from farming. This paper examines whether the reluctance among farmers to plant forestry originates in the nature of forestry investment, which is characterised by the irreversibility of the decision, the uncertainty about future returns, and the ability to delay investment in forestry. In this paper we use a real options method and focus on the contribution of uncertainty in returns and costs to the decision to invest in forestry.

Original languageEnglish (US)
Pages (from-to)305-320
Number of pages16
JournalEconomic and Social Review
Volume35
Issue number3
StatePublished - Dec 1 2004
Externally publishedYes

    Fingerprint

ASJC Scopus subject areas

  • Sociology and Political Science
  • Economics and Econometrics

Cite this