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Modeling The Effect Of Uncertainty On Timber Harvest: A Suggested Approach And Empirical Example

Author

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  • van Kooten, G. Cornelis
  • van Kooten, R.E.
  • Brown, G.L.

Abstract

A method is suggested for modeling uncertainty when there is a lack of information concerning the effect of forest management decisions on tree growth. Dynamic programming is used to investigate the optimality of alternative management strategies. The model is illustrated with an empirical example for a boreal forest region of western Canada. Three tentative conclusions follow: (a) silvicultural strategies to reduce uncertainty or to increase stand growth may not be worth pursuing, at least in northern forests; (b) the discounted cost of ignoring uncertainty may be substantial if taken over the entire forest; and (c) given uncertain forest growth, flexible harvest policies are preferred to a fixed harvest age.

Suggested Citation

  • van Kooten, G. Cornelis & van Kooten, R.E. & Brown, G.L., 1992. "Modeling The Effect Of Uncertainty On Timber Harvest: A Suggested Approach And Empirical Example," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 17(1), pages 1-11, July.
    • Handle: RePEc:ags:jlaare:30740
    DOI: 10.22004/ag.econ.30740
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    References listed on IDEAS

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    1. Robert S. Pindyck, 1984. "Uncertainty in the Theory of Renewable Resource Markets," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 51(2), pages 289-303.
    2. Tracy R. Lewis, 1981. "Exploitation of a Renewable Resource under Uncertainty," Canadian Journal of Economics, Canadian Economics Association, vol. 14(3), pages 422-439, August.
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    Cited by:

    1. Amitrajeet A. Batabyal & Henk Folmer, 2020. "Spatial economic aspects of climate change," Spatial Economic Analysis, Taylor & Francis Journals, vol. 15(3), pages 209-218, July.
    2. Knapp, Keith C. & Sadorsky, Perry A., 2000. "Economics Of Agroforestry Production In Irrigated Agriculture," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(1), pages 1-21, July.
    3. Newman, D.H., 2002. "Forestry's golden rule and the development of the optimal forest rotation literature," Journal of Forest Economics, Elsevier, vol. 8(1), pages 5-27.

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