TITLE

A Hotelling�Faustmann Explanation of the Structure of Christmas Tree Prices

AUTHOR(S)
Vukina, Tomislav; Hilmer, Christiana E.; Lueck, Dean
PUB. DATE
August 2001
SOURCE
American Journal of Agricultural Economics;Aug2001, Vol. 83 Issue 3
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
We examine the relationship between a tree price and a tree age (height) using a Hotelling�Faustmann type model of optimal plantation management, which accounts for the possibility of replanting and biological growth. The model predictions are tested using the data on Christmas tree prices in North Carolina collected in December 1997. The estimates show that, in general, the rates of change in prices between adjacent age cohorts reflect a competitive equilibrium in the capital market thus supporting the Hotelling�Faustmann paradigm.
ACCESSION #
5053228

 

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