IDEAS home Printed from https://ideas.repec.org/a/eee/forpol/v62y2016icp88-94.html
   My bibliography  Save this article

Economics of rotation and thinning revisited: the optimality of clearcuts versus continuous cover forestry

Author

Listed:
  • Tahvonen, Olli

Abstract

A continuous time-economic model for optimal thinning and rotation is modified to include natural regeneration. The respecified model is capable of describing both optimal forest rotation and continuous cover forestry (uneven-aged management). Continuous cover forestry is shown to be optimal if the preset value of continuous sustainable harvesting income over an infinite horizon is higher than the clearcut revenue and the highest possible value of bare land. Negative bare land value implies optimality of continuous cover forestry but only if clearcut stumpage prices are not higher than thinning stumpage prices. Given low interest rate optimized thinning is shown to increase rotation length.

Suggested Citation

  • Tahvonen, Olli, 2016. "Economics of rotation and thinning revisited: the optimality of clearcuts versus continuous cover forestry," Forest Policy and Economics, Elsevier, vol. 62(C), pages 88-94.
    • Handle: RePEc:eee:forpol:v:62:y:2016:i:c:p:88-94
    DOI: 10.1016/j.forpol.2015.08.013
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1389934115300435
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.forpol.2015.08.013?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    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. Olli Tahvonen, 2015. "Economics of Naturally Regenerating, Heterogeneous Forests," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 2(2), pages 309-337.
    3. Binkley, Clark S., 1987. "When is the optimal economic rotation longer than the rotation of maximum sustained yield?," Journal of Environmental Economics and Management, Elsevier, vol. 14(2), pages 152-158, June.
    4. Khazri, Olfa & Lasserre, Pierre, 2011. "Forest management: Are double or mixed rotations preferable to clear cutting?," Resource and Energy Economics, Elsevier, vol. 33(1), pages 155-171, January.
    5. 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.
    6. Samuelson, Paul A, 1976. "Economics of Forestry in an Evolving Society," Economic Inquiry, Western Economic Association International, vol. 14(4), pages 466-492, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Eyvindson, Kyle & Repo, Anna & Mönkkönen, Mikko, 2018. "Mitigating forest biodiversity and ecosystem service losses in the era of bio-based economy," Forest Policy and Economics, Elsevier, vol. 92(C), pages 119-127.
    2. Petri P Kärenlampi, 2019. "Wealth accumulation in rotation forestry – Failure of the net present value optimization?," PLOS ONE, Public Library of Science, vol. 14(10), pages 1-19, October.
    3. Patto, João V. & Rosa, Renato, 2022. "Adapting to frequent fires: Optimal forest management revisited," Journal of Environmental Economics and Management, Elsevier, vol. 111(C).
    4. Sloggy, Matthew R. & Kling, David M. & Plantinga, Andrew J., 2020. "Measure twice, cut once: Optimal inventory and harvest under volume uncertainty and stochastic price dynamics," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).
    5. Evison, David & Bloomberg, Mark & Walker, Liam & Howley, Matt, 2024. "The economics of managing a small-scale radiata pine forest using target diameter harvesting," Forest Policy and Economics, Elsevier, vol. 161(C).
    6. McTaggart, Ewan & Megiddo, Itamar & Kleczkowski, Adam, 2023. "The effect of pests and pathogens on forest harvesting regimes: A bioeconomic model," Ecological Economics, Elsevier, vol. 209(C).
    7. Nguyen, Trung Thanh & Nghiem, Nhung, 2016. "Optimal forest rotation for carbon sequestration and biodiversity conservation by farm income levels," Forest Policy and Economics, Elsevier, vol. 73(C), pages 185-194.
    8. Chen, Si & Shahi, Chander & Chen, Han Y.H. & McLaren, Brian, 2017. "Economic analysis of forest management alternatives: Compositional objectives, rotation ages, and harvest methods in boreal forests," Forest Policy and Economics, Elsevier, vol. 85(P1), pages 124-134.
    9. Kolo, Horst & Kindu, Mengistie & Knoke, Thomas, 2020. "Optimizing forest management for timber production, carbon sequestration and groundwater recharge," Ecosystem Services, Elsevier, vol. 44(C).
    10. Petri P. Kärenlampi, 2018. "Stationary Forestry with Human Interference," Sustainability, MDPI, vol. 10(10), pages 1-17, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tahvonen, Olli & Salo, Seppo, 1999. "Optimal Forest Rotation within SituPreferences," Journal of Environmental Economics and Management, Elsevier, vol. 37(1), pages 106-128, January.
    2. Gan, Jianbang & Kolison, Stephen H. & Colletti, Joe P., 2001. "Optimal forest stock and harvest with valuing non-timber benefits: a case of US coniferous forests," Forest Policy and Economics, Elsevier, vol. 2(2), pages 167-178, June.
    3. 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.
    4. Parkatti, Vesa-Pekka & Tahvonen, Olli, 2021. "Economics of multifunctional forestry in the Sámi people homeland region," Journal of Environmental Economics and Management, Elsevier, vol. 110(C).
    5. Chang, Sun Joseph, 2020. "Twenty one years after the publication of the generalized Faustmann formula," Forest Policy and Economics, Elsevier, vol. 118(C).
    6. Jones, Philip C. & Ohlmann, Jeffrey W., 2008. "Long-range timber supply planning for a vertically integrated paper mill," European Journal of Operational Research, Elsevier, vol. 191(2), pages 558-571, December.
    7. Deegen Peter, 2013. "Die Stellung der Tharandter Theorien der forstlichen Nachhaltigkeit in Hayeks Klassifikation der Formen menschlicher Ordnung / The relation among the Tharandt-based theories of forest sustainability a," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 64(1), pages 79-98, January.
    8. Langholtz, Matthew & Carter, Douglas R. & Rockwood, Donald L. & Alavalapati, Janaki R.R. & Green, Alex, 2005. "Effect of dendroremediation incentives on the profitability of short-rotation woody cropping of Eucalyptus grandis," Forest Policy and Economics, Elsevier, vol. 7(5), pages 806-817, August.
    9. Nguyen, Trung Thanh & Nghiem, Nhung, 2016. "Optimal forest rotation for carbon sequestration and biodiversity conservation by farm income levels," Forest Policy and Economics, Elsevier, vol. 73(C), pages 185-194.
    10. 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.
    11. Chang, Sun Joseph & Deegen, Peter, 2011. "Pressler's indicator rate formula as a guide for forest management," Journal of Forest Economics, Elsevier, vol. 17(3), pages 258-266, August.
    12. Koster, Roman & Fuchs, Jasper M., 2022. "Opportunity costs of growing space – an essential driver of economical single-tree harvest decisions," Forest Policy and Economics, Elsevier, vol. 135(C).
    13. Morag F. Macpherson & Adam Kleczkowski & John R. Healey & Nick Hanley, 2018. "The Effects of Disease on Optimal Forest Rotation: A Generalisable Analytical Framework," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 70(3), pages 565-588, July.
    14. M.J. Penttinen, 2000. "Timber Harvesting with Variable Prices and Costs," Working Papers ir00045, International Institute for Applied Systems Analysis.
    15. Halbritter, Andreas, 2015. "An economic analysis of double-cohort forest resources," Journal of Forest Economics, Elsevier, vol. 21(1), pages 14-31.
    16. Sinha, Ankur & Rämö, Janne & Malo, Pekka & Kallio, Markku & Tahvonen, Olli, 2017. "Optimal management of naturally regenerating uneven-aged forests," European Journal of Operational Research, Elsevier, vol. 256(3), pages 886-900.
    17. Yuri Biondi, 2009. "Capital budgeting under relational contracting: optimal ranking and duration criteria for schemes of concession, project-financing and public-private partnership," Post-Print hal-00404305, HAL.
    18. Todorova, Tamara, 2013. "Solving optimal timing problems elegantly," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 4(6), pages 95-105.
    19. Couture, Stéphane & Reynaud, Arnaud, 2011. "Forest management under fire risk when forest carbon sequestration has value," Ecological Economics, Elsevier, vol. 70(11), pages 2002-2011, September.
    20. Knoke, Thomas & Kindu, Mengistie & Jarisch, Isabelle & Gosling, Elizabeth & Friedrich, Stefan & Bödeker, Kai & Paul, Carola, 2020. "How considering multiple criteria, uncertainty scenarios and biological interactions may influence the optimal silvicultural strategy for a mixed forest," Forest Policy and Economics, Elsevier, vol. 118(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:forpol:v:62:y:2016:i:c:p:88-94. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/forpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.