Economic impact of growth effects in mixed stands of Norway spruce and European beech – A simulation based study

Stefan Friedrich, Carola Paul, Susanne Brandl, Peter Biber, Katharina Messerer and Thomas Knoke

Forest Policy and Economics, 2019, vol. 104, issue C, 65-80

Abstract: Productivity in mixed forest stands is often higher than that in pure forest stands. Economic analyses usually exclude this phenomenon. In our study, we assess the consequences of an increased productivity in mixed forests for the economically optimal proportions of tree species in forest stands. The economic model applied centers around the Modern Portfolio Theory with the Value-at-Risk as the objective function. The methodological approach encompasses a structured Monte Carlo simulation to generate distributions of returns for different scenarios. Risks include price fluctuations for raw wood as well as natural hazards. The study's major novelty is that it combines well-researched productivity relations in mixed forests with recent empirical survival models for mixed and pure stands to address site variability across Bavaria.

Keywords: Portfolio analysis; Value-at-risk; Tree species mixture; Overyielding; Survival probability (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:forpol:v:104:y:2019:i:c:p:65-80

DOI: 10.1016/j.forpol.2019.04.003

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