Structural estimation of a dynamic model of joint production of timber and amenities

Jérôme Foncel () and Eric Kere
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Jérôme Foncel: Université Lille 3 Charles-de-Gaulle,

No 2013-04, Working Papers - Cahiers du LEF from Laboratoire d'Economie Forestiere, AgroParisTech-INRA

Abstract: Using a stochastic dynamic programming model we analyze how French private forest owners make inter-temporal trade-offs between non-timber amenities and timber income. We explicitly take into account the price expectations and forest growth. In addition, unlike previous empirical studies involving clear-cutting, we consider that the owner can make a partial cut. Our estimation results show that the willingness to pay for non-timber amenities is €23 in our case study. This value represents the difference between the amount an owner would earn if he maximized timber revenue and the revenue of their actual logging. Given the intention of the French government to develop the use of lumber, we show to which extent prices could be subsidized to increase production provided that private owners value amenities. In addition, the introduction of a tax on the stock for amenities could be used to increase timber production.

Keywords: Forest economics; amenities; Indirect inference; stochastic dynamic programming. (search for similar items in EconPapers)
JEL-codes: C61 C63 C81 Q23 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2013-06, Revised 2013-06
New Economics Papers: this item is included in nep-agr
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