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Relation between the Pattern of Use and the Future Output from a Flow Resource
Richard J. McConnen
Journal of Farm Economics
Vol. 47, No. 2 (May, 1965), pp. 311-323
Stable URL: http://www.jstor.org/stable/1236578
Page Count: 13
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Pattern of use influence on future rates of flow was quantified for heavily grazed Great Plains grassland using two models--one treating pattern of use influence on rates of flow without interaction with exogenous variables and the other treating pattern of use influence with interaction. In the first model, heavy grazing decreased the future levels of the forage-precipitation response function. While in the second model, both the level and the shape of this response function were changed. An intermediate grazing level was simulated and alternative grazing levels for a simple grassland enterprise compared. Using the first model, the intermediate level was best if the required marginal internal rate of return were less than 10.5 percent. Using the second model, heavy grazing both decreased future income levels and markedly changed the shape of the probability distribution. Continued heavy use caused the resource to become, in an economic sense, a different resource.
Journal of Farm Economics © 1965 Agricultural & Applied Economics Association