Estimating Intertemporal Preferences for Natural Resource Allocation

@inproceedings{Howitt2005EstimatingIP,
  title={Estimating Intertemporal Preferences for Natural Resource Allocation},
  author={Richard E. Howitt and Siwa Msangi and Arnaud Reynaud and Keith C. Knapp},
  year={2005}
}
In this article, we show how the degree of risk aversion, discounting, and preference for intertemporal substitution for a natural resource manager can be structurally estimated within a recursive utility framework. We focus on the management of a reservoir in California, and test the data for consistency with a recursive utility model specification versus standard time-additive separability. The results show that the data are consistent with a risk-averse manager with recursive preferences… CONTINUE READING