Three essays on application of optimization modeling and Monte Carlo simulation to consumer demand and carbon sequestration

This dissertation is composed of three chapters with applications of optimization modeling and Monte Carlo simulation to consumer demand system analysis and land based carbon sequestration.;The first essay analyzes the influences of food scares such as BSE and the bird flu on fresh meat consumption in South Korea and Japan. The regression analysis results revealed the significance of most media parameters. The simulation results showed potential consumer reactions to newspaper articles about food safety by using the Monte Carlo simulation technique. The results also provide useful information for predicting prospective damages and setting up countermeasures in case of another outbreak of the same disease in the future.;The second essay analyzes the effect of uncertainty in several key parameters on land based carbon sequestration. These parameters include the land supply elasticity, the forest biomass yield function, and the cost of an increase in the endowment in deforestation regions. The least square linearization is used to determine the relative contribution of input parameters to the model results. Five hundred model runs in one simulation were performed. The Monte Carlo simulations indicated that most of the uncertainty in forest areas in developed countries relates to uncertainty in the parameters of the biomass function, whereas in developing countries, where deforestation is more important (e.g., Brazil), the simulation showed the parameters of land supply elasticity to have the most important significant effect on the uncertainty in forest area and carbon stocks. The results also provide information that can be used to estimate uncertainty intervals for carbon sequestration cost functions.;The third essay develops a dynamic, regional analysis of the effects of US and European biofuel mandates on land use, forestry stocks, and carbon emissions. The results suggest that these mandates may cause an additional 23-26 million hectares of forestland losses globally, but additional carbon emissions of 1.2--1.6 billion t CO2. The estimates are found to be sensitive to the elasticity parameter on the land supply function in the model, with the higher elasticity estimates associated with larger carbon losses. The regional analysis turns out to be quite important, because some regions end up gaining forestland and increasing carbon stocks. The regional and dynamic effects have been missed by most other noteworthy analyses of the induced land use effects of biofuel policies, potentially leading the authors to overstate the impacts by 3-6 times.