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Investment in Land Use for Pollution Abatement Under Uncertainty ...

Source: www-sekon.slu.se
Topic: Land Investment

Sort Desciption: Investment in Land Use for Pollution Abatement Under Uncertainty. Abstract. Sandra Lerda. The Beijer Institute, The Royal Swedish. Academy of Sciences ...

Content Inside: Investment in Land Use for Pollution Abatement Under Uncertainty Abstract Sandra Lerda The Beijer Institute, The Royal Swedish Academy of Sciences P.O. Box 50005, SE-104 05 Stockholm, Sweden This paper attempts to discuss the issue of how uncertainty affects the decision of a landowner about converting agricultural productive land into wetlands. Conversion may result from the behavior of a risk avert farmer trying to diversify her investment options. However, the potential irreversibility of the decision to convert can produce an effect contrary to that of the risk aversion. The decision to change the land use is also affected by the possibility of receiving new information and by the time when this information arrives.

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