International Review of Environmental and Resource Economics > Vol 7 > Issue 2

Structural and Observational Uncertainty in Environmental and Natural Resource Management

Paul L. Fackler, Department of Agricultural and Resource Economics, North Carolina State University, USA, paul_fackler@ncsu.edu
 
Suggested Citation
Paul L. Fackler (2014), "Structural and Observational Uncertainty in Environmental and Natural Resource Management", International Review of Environmental and Resource Economics: Vol. 7: No. 2, pp 109-139. http://dx.doi.org/10.1561/101.00000058

Published: 01 Jul 2014
© 2014 P. L. Fackler
 
Subjects
Markov Decision Processes,  Environmental Economics
 
Keywords
C61Q20Q30
Structural uncertaintyObservational uncertaintyMarkov Decision ProblemsDynamic programmingAdaptive managementPOMDPs
 

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In this article:
1. Introduction
2. Markov Decision Problems
3. Structural Uncertainty
4. Observational Uncertainty
5. A General Framework for Addressing Structural and Observational Uncertainty
References

Abstract

Structural uncertainty arises when key features of the behavior of a system are not well understood. Observational uncertainty arises when key variables in a system are not directly observed. Both types of uncertainty lead to problems for standard dynamic optimization approaches. The replacement of uncertainties by belief distributions over those uncertainties is one approach to addressing the problem. The use of this and other approaches are reviewed, with an emphasis on applications to environmental and resource management problems.

DOI:10.1561/101.00000058