Intergenerational resource rights, efficiency, and social optimality

In resource economics, the line demarcating efficiency and equity is often crossed. The term "optimal depletion" is often used when only efficient depletion is meant. Resource economists have generally espoused particular use rules that ensure efficiency but overlook possible improvements...

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Bibliographic Details
Published in:Land economics 1990-02, Vol.66 (1), p.1-11
Main Authors: Howarth, R.B. (University of California, Berkeley), Norgaard, R.B
Format: Article
Language:English
Subjects:
AFFECTATION DE RESSOURCES
Allocative efficiency
ASIGNACION DE RECURSOS
BIEN ETRE SOCIAL
BIENESTAR SOCIAL
ECONOMIA
Economic aspects
Economic efficiency
Economic models
Economic resources
Economic theory
ECONOMICS
ECONOMIE
Efficiency
Endowments
Environmental policy
Land economics
Land use
Market equilibrium
MODELE
MODELOS
Natural resources
Natural resources conservation
optimal depletion
OWNERSHIP
Pareto optimum
PROPIEDAD
PROPRIETE
RESOURCE ALLOCATION
Resource economics
Resource ownership
SOCIAL WELFARE
Utility functions
Welfare economics
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Summary:In resource economics, the line demarcating efficiency and equity is often crossed. The term "optimal depletion" is often used when only efficient depletion is meant. Resource economists have generally espoused particular use rules that ensure efficiency but overlook possible improvements in social welfare that can be achieved through the reassignment of property rights across generations. The evolution and current status of the misuse of the term optimal depletion is documented. A simple 2-generation, 3-period general equilibrium model is developed to illustrate how alternative distributions of resource rights between generations relate to alternative Pareto-efficient solutions. It is demonstrated how different social welfare functions affect the optimal solution and the associated assignment of resource rights between generations.
ISSN:0023-7639
1543-8325
DOI:10.2307/3146678