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Economic analysis of exploitation and regeneration in plantations with problematic site productivity

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  • Halbritter, Andreas
  • Deegen, Peter

Abstract

Although intensive managed plantations clearly increase the growth and yield of forests several papers refer to declining forest productivity. Therefore in this paper we study the impact of declining forest productivity on the land expectation value and the optimal rotation length. We start from the research by Lu and Chang (1996) and try to fill the gap between the stable site productivity (âbestâ) and the site mining (âworstâ) cases. For that we extend the classical Faustmann model by availability of different recovering technologies. In general the model allows the analysis of the two plantation groups: âmining the site by high productive plantation followed by management of degraded areasâ and âhigh productive plantation and regeneration cyclingâ with the same comparative static. The model, analysis and comparison with the two extreme cases in Lu and Chang (1996) leads to a detailed understanding of land use management when site productivity decline is possible. Particularly the relation between declining periods with intensive land use and land use alternatives after declining periods with regeneration can be well understood. Findings are: Not ever declining process asks for regeneration. Many declining processes can be stopped at early times by high cash flows after mining periods. Shortenings of the regeneration time can boost site mining intensities.

Suggested Citation

  • Halbritter, Andreas & Deegen, Peter, 2011. "Economic analysis of exploitation and regeneration in plantations with problematic site productivity," Journal of Forest Economics, Elsevier, vol. 17(3), pages 319-334, August.
  • Handle: RePEc:eee:foreco:v:17:y:2011:i:3:p:319-334
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    References listed on IDEAS

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    1. Sedjo, Roger, 1999. "Biotechnology and Planted Forests: Assessment of Potential and Possibilities," RFF Working Paper Series dp-00-06, Resources for the Future.
    2. Sedjo, Roger A., 1999. "Biotechnology and Planted Forests: Assessment of Potential and Possibilities," Discussion Papers 10862, Resources for the Future.
    3. Chang, Sun Joseph & Gadow, Klaus V., 2010. "Application of the generalized Faustmann model to uneven-aged forest management," Journal of Forest Economics, Elsevier, vol. 16(4), pages 313-325, December.
    4. David H. Newman & Charles B. Gilbert & William F. Hyde, 1985. "The Optimal Forest Rotation with Evolving Prices," Land Economics, University of Wisconsin Press, vol. 64(4), pages 347-353.
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    1. Halbritter, Andreas & Deegen, Peter, 2015. "A combined economic analysis of optimal planting density, thinning and rotation for an even-aged forest stand," Forest Policy and Economics, Elsevier, vol. 51(C), pages 38-46.
    2. Deegen, Peter & Halbritter, Andreas, 2018. "The pure market allocation of land between forestry and agriculture," Forest Policy and Economics, Elsevier, vol. 97(C), pages 122-131.
    3. Zhang, Daowei & Stenger, Anne & Harou, Patrice A., 2015. "Policy instruments for developing planted forests: Theory and practices in China, the U.S., Brazil, and France," Journal of Forest Economics, Elsevier, vol. 21(4), pages 223-237.
    4. Coordes, Renke, 2016. "The emergence of forest age structures as determined by uneven-aged stands and age class forests," Journal of Forest Economics, Elsevier, vol. 25(C), pages 160-179.
    5. Khan, M. Ali, 2016. "On a forest as a commodity and on commodification in the discipline of forestry," Forest Policy and Economics, Elsevier, vol. 72(C), pages 7-17.
    6. Chang, Sun Joseph, 2020. "Twenty one years after the publication of the generalized Faustmann formula," Forest Policy and Economics, Elsevier, vol. 118(C).

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