The Economics of Timber: A Renewable Resource in the Long Run

Peter Berck

Bell Journal of Economics, 1979, vol. 10, issue 2, 447-462

Abstract: Critics of current and historical trends in timber production contend that private owners cut their woods more quickly than optimal while public managers cut their forests more slowly than optimal. Using the Douglas fir industry, this paper shows that private entrepreneurs holding rational expectations with respect to future prices have historically been discounting the future at a real rate of 5 percent -- a much lower rate than that available for other private investments -- and, therefore, that these owners have not cut their forests prematurely. In the case of public management, calculated shadow losses incurred by holding old timber are so great that an appeal to nontimber use values is not sufficient to reconcile management practices. Finally, predictions for the long-term price trends for timber indicate a slowdown in the rate of price increase.

Date: 1979
References: Add references at CitEc
Citations: View citations in EconPapers (20)

Downloads: (external link)
http://links.jstor.org/sici?sici=0361-915X%2819792 ... O%3B2-5&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
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:rje:bellje:v:10:y:1979:i:autumn:p:447-462

Ordering information: This journal article can be ordered from
https://editorialexp ... i-bin/rje_online.cgi

Access Statistics for this article

More articles in Bell Journal of Economics from The RAND Corporation
Bibliographic data for series maintained by ().