Forest Value and Optimal Rotations in Continuous Cover Forestry

Jette Bredahl Jacobsen (), Frank Jensen () and Bo Thorsen
Additional contact information
Jette Bredahl Jacobsen: University of Copenhagen
Frank Jensen: University of Copenhagen

Environmental & Resource Economics, 2018, vol. 69, issue 4, No 4, 713-732

Abstract: Abstract The Faustmann forest rotation model is a celebrated contribution in economics. The model provides a forest value expression and allows a solution to the optimal rotation problem valid for perpetual rotations of even-aged forest stands. However, continuous forest cover forest management systems imply uneven-aged dynamics, and while a number of numerical studies have analysed specific continuous cover forest ecosystems in search of optimal management regimes, no one has tried to capture key dynamics of continuous cover forestry in simple mathematical models. In this paper we develop a simple, but rigorous mathematical model of the continuous cover forest, which strictly focuses on the area use dynamics that such an uneven-aged forest must have in equilibrium. This implies explicitly accounting for area reallocation and for weighting the productivity of each age class by the area occupied. We present results for unrestricted as well as area-restricted versions of the models. We find that land values are unambiguously higher in the continuous cover forest models compared with the even-aged models. Under area restrictions, the optimal rotation age in a continuous cover forest model is unambiguously lower than the corresponding area restricted Faustmann solution, while the result for the area unrestricted model is ambiguous.

Keywords: Capital budgeting; Faustmann rotation model; Uneven-aged forest management (search for similar items in EconPapers)
JEL-codes: Q23 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://link.springer.com/10.1007/s10640-016-0098-z Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
Working Paper: Forest value and optimal rotations in continuous cover forestry (2015)
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:kap:enreec:v:69:y:2018:i:4:d:10.1007_s10640-016-0098-z

Ordering information: This journal article can be ordered from
http://www.springer. ... al/journal/10640/PS2

DOI: 10.1007/s10640-016-0098-z

Access Statistics for this article

Environmental & Resource Economics is currently edited by Ian J. Bateman

More articles in Environmental & Resource Economics from Springer, European Association of Environmental and Resource Economists Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().