Hedging Strategies in Forest Management

Marielle Brunette (), Stéphane Couture and Eric Langlais

No 2007-07, Working Papers - Cahiers du LEF from Laboratoire d'Economie Forestiere, AgroParisTech-INRA

Abstract: The paper focuses on the choice of forest management strategies for natural hazards by nonindustrial owners, when forest provides nontimber services. We introduce a basic two-period model where the private owner hedges against natural hazards on his/her forest thanks to financial strategies (accumulation of savings) or to the adoption of sylvicultural practices. We show that: 1/ the harvesting rule, in the presence of amenity services and a random growth rate for forest, is smaller than the one predicted under the Faustmann’s rule; 2/ savings and sylvicultural pratices may be seen as perfectly substitutable tools. However, our analysis predicts that, depending on whether forest owners opt for the financial strategy or undertake sylvicultural practices, the harvesting rule displays a specific sensitivity to price effects and/or changes in the distribution of natural hazards.

Keywords: Risk; Forest; Amenities; Savings and Sylvicultural practices (search for similar items in EconPapers)
JEL-codes: D81 Q23 Q54 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2007-11
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.nancy.inra.fr/lef/content/download/2907 ... doc_LEF_n2007-07.pdf First version, 2007 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.nancy.inra.fr/lef/content/download/2907/28858/version/1/file/doc_LEF_n2007-07.pdf [301 Moved Permanently]--> https://www.nancy.inra.fr/lef/content/download/2907/28858/version/1/file/doc_LEF_n2007-07.pdf [301 Moved Permanently]--> https://www.inrae.fr/centres/grand-est-nancy/lef/content/download/2907/28858/version/1/file/doc_LEF_n2007-07.pdf)

Related works:
Working Paper: Hedging strategies in forest management (2020)
Working Paper: Hedging Strategies in Forest Management (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lef:wpaper:2007-07

Access Statistics for this paper

More papers in Working Papers - Cahiers du LEF from Laboratoire d'Economie Forestiere, AgroParisTech-INRA Contact information at EDIRC.
Bibliographic data for series maintained by Sylvain CAURLa ( this e-mail address is bad, please contact ).