Flowering and pollination studies with European plum (Prunus domestica L.) cultivars

One of the most important factors affecting the financial outcome of commercial fruit growing is the success of pollination and fertilization, which in turn are dependent on weather conditions, activity of pollinators and the compatibility and overlap in flowering of the cultivars. Before introducing new cultivars, it is obviously important to know the compatibility and flowering characteristics of the genotypes. In order to find out these attributes of seven new and four established plum cultivars, pollen germination tests, hand pollinations and flowering phenology observations were carried out. ‘Prosser 84’ had 70% pollen germination. ‘Opal’ had just 3%, probably due to aged pollen. ‘Anna Späth’ flowered over a short period (13 days) and ‘1468’ and ‘DCA BO 46’ over long (19 days) periods; the overlap of all cultivars was relatively good. With ‘1468’, ‘Victory’, ‘Anna Späth’ and ‘Prosser 84’ flowering intensity varied between years, ‘Jubileum’, ‘V70032’, ‘Tita’ and ‘DCA BO 46’ flowered regularly, the others were intermediate. ‘1468’ and ‘WJ 65’ flowered early, ‘Prosser 84’ and ‘DCA BO 46’ late and the rest fell in between. ‘Victoria’ proved to be self-fertile, ‘Jubileum’, ‘V70032’ and ‘1468’ semi self-fertile. Fruit set percentages after June drop of all crosses were rather low; varying between 0 and 28%. With ‘Tita’, fruit drop occurred approximately two weeks later than with the other cultivar

Irreversible Investment under Interest Rate Variability: New Results

The current extensive literature on irreversible investment decisions makes the assumption of constant interest rate. In this paper we study the impact of interest rate and revenue variability on the decision to carry out an irreversible investment project. Given the generality of the considered valuation problem, we first provide a thorough mathematical characterization of the problem and develop some new results. Contrary to what previous literature has suggested we establish that interest rate variability may have a profound decelerating or accelerating impact on investment demand depending on whether the current interest rate is below or above the long run steady state interest rate. Moreover, and importantly, allowing for interest rate uncertainty is shown to decelerate rational investment demand by raising both the required exercise premium of the irreversible investment opportunity and the value of waiting. Finally, we demonstrate that increased revenue volatility strengthens the negative impact of interest rate uncertainty and vice versa.irreversible investment, variable interest rates, free boundary problems.

A General Approach to the Stochastic Rotation Problem with Amenity Valuation

This paper presents a new approach to study the optimal rotation policy with amenity valuation under uncertainty. We first postulate the stochastic forest value and assume plausibly that monetary value of amenities is a continuous and non-negative function of forest value thus presenting the trade-off between timber revenues and amenity values. Second, instead of using a dynamic programming approach, we derive a recursive representation of the total forest value and solve the optimal rotation threshold by applying ordinary non-linear programming techniques. Third, we characterize under certain set of conditions how the properties of both the expected cumulative value and the expected marginal cumulative value, accrued from amenity services, depend on the precise nature of the monetary valuation of amenities and what is the impact of volatility on these concepts. Finally, we illustrate our results explicitly in models based on logistic growth by focusing on the role of amenity valuation and volatility of forest value in the determination of Wicksellian and Faustmannian thresholds. Our theoretical and numerical findings emphasize the crucial importance of the nature of amenity valuation for the impact of higher volatility of forest value on the rotation thresholds.amenity valuation, optimal Faustmannian and Wicksellian rotation policy, stochatic impulse control

Progressive Taxation and Irreversible Investment under Uncertainty

We analyze the impact of progressive taxation on irreversible investment under uncertainty. We show that if tax exemption is lower than sunk cost, higher tax rate will decelerate optimal investment by increasing the optimal investment threshold, while if tax exemption exceeds sunk cost, three different regimes arise. For "small" volatilities the optimal investment threshold is a positive function of volatility, but independent of tax rate. For "medium" volatilities it is independent of both tax rate and volatility. Finally, for "high" volatilities the optimal investment threshold depends positively on volatility, but negatively on tax rate so that we have "tax paradox".irreversible investments under uncertainty, progressive taxation

Wicksellian Theory of Forest Rotation under Interest Rate Variability

The current literature on optimal forest rotation makes the assumption of constant interest rate. However, the irreversible harvesting decisions of forest stands are typically subject to relatively long time horizons over which interest rates do fluctuate considerably. In this paper we apply the Wicksellian single rotation framework to extend the existing studies to cover the unexplored case of variable interest rate. Given the technical generality of the considered valuation problem, we provide a thorough mathematical characterization of the optimal timing problem and develop new results. We show that even in the deterministic case if the current interest rate deviates from its long-run steady state, interest rate variability changes the rotation age significantly when compared with the constant discounting case. Further, and importantly, allowing for interest rate uncertainty is shown to increase the optimal rotation period when the value of the optimal policy is a convex function of the current interest rate. In line with this finding, we also establish that increased interest rate volatility has a positive impact on the optimal rotation period.Wicksellian rotation, variable interest rates, linear diffusions, optimal stopping, free boundary problems

Taxation and Rotation Age under Stochastic Forest Stand Value

The paper uses both the single rotation and ongoing rotation framework to study the impact of yield tax, lump-sum tax, cash flow tax and tax on interest rate earnings on the privately optimal rotation period when forest value growth is stochastic and forest owners are either risk neutral or risk averse. In the case of risk-neutral forest owner higher yield tax raises the optimal harvesting threshold and thereby prolongs the expected rotation period. The same qualitative result holds for lump-sum tax and for the tax on interest rate earnings, while the cash flow tax is neutral. Under risk aversion the optimal harvesting threshold is lower and the expected rotation period shorter than under risk neutrality both in the single and ongoing rotation cases. Comparative statics of taxes are similar as under risk neutrality with the exception of cash flow tax, which may not be neutral anymore. Numerical results indicate that the optimal harvesting threshold both as a function of the yield tax and the forest value volatility increases more rapidly under risk neutrality than under risk aversion.optimal rotation, taxation, stochastic forest value, risk aversion

On the Tree-Cutting Problem under Interest Rate and Forest Value Uncertainty

The current literature on optimal forest rotation makes the unrealistic assumption of constant interest rate though harvesting decisions of forest stands are typically subject to long time horizons. We apply the Wicksellian single rotation framework to cover the unexplored case of variable and stochastic interest rate. By modelling the stochastic interest rate according to the Cox-Ingersoll-Ross model and the forest value as a geometric Brownian motion we provide an explicit solution for the Wicksellian single rotation problem and show that increased interest rate volatility increases the optimal exercise threshold of the irreversible harvesting opportunity and thereby prolongs the optimal rotation period. Numerical illustration indicates that the optimal threshold becomes higher at an increasing rate.forest rotation, optimal stopping, stochastic interest rates

Optimal Harvesting under Resource Stock and Price Uncertainty

We analyze optimal harvesting policy under stochastic price and stock dynamics. We state a set of weak conditions under which the optimal policy can be characterized by a single exercise threshold and show that the value of optimal harvesting and depletion policies can be expressed as the separable form according to which only the current price and the expected per capita growth rate affect the threshold, while under risk neutrality volatility of price dynamics will have no effect. Uncertainty makes waiting valuable and the optimal threshold is higher when harvesting can be exercised only once than in the sequential case.optimal harvesting, stochastic price and stock dynamics, single and sequential harvesting opportunity

Taxation and Rotation Age under Stochastic Forest Stand Value

The paper uses both the single rotation and ongoing rotation framework to study the impact of yield tax, lump-sum tax, cash flow tax and tax on interest rate earnings on the privately optimal rotation period when forest value growth is stochastic and forest owners are either risk neutral or risk averse. Under risk neutrality forest owner higher yield tax raises the optimal harvesting threshold and thereby prolongs the expected rotation period. The same qualitative result holds for lump-sum tax and for the tax on interest rate earnings, while the cash flow tax is neutral. Under risk aversion the optimal harvesting threshold is lower and the expected rotation period shorter than under risk neutrality both in the single and ongoing rotation cases. Comparative statics of taxes are similar as under risk neutrality with the exception of cash flow tax, which may not be neutral anymore. Numerical results indicate that the optimal harvesting threshold both as a function of the yield tax and the forest value volatility increases more rapidly under risk neutrality than under risk aversion