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A generalized Reed model with application to wildfire risk in even-aged Southern United States pine plantations

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  • Susaeta, Andres
  • Carter, Douglas R.
  • Chang, Sun Joseph
  • Adams, Damian C.

Abstract

We develop a generalized Reed model to incorporate the risk of wildfires on optimal management of slash pine (Pinus elliotti var. elliotti) in the southern United States. Comparative static analyses are conducted to determine the impacts of the probability of increasing and constant wildfire risk as forest stand ages, and portion of stand that is salvageable following a wildfire, on slash pine harvest decisions. Our results reveal that increasing the current risk of wildfire damage would shorten the current optimal slash pine harvest age, while increasing the future risk of wildfire losses would lengthen the current optimal harvest age. We also compare the impacts of different wildfire arrival paths (rising and constant arrival rate with stand age) on the optimal forest management of slash pine. Under the generalized model, increases in future rising wildfire risks have less impact than increases in future constant wildfire risks on the optimal harvest ages for the current crop. Increases in the current rising risk of wildfires have a similar impact on the optimal harvest age compared to increases in the current constant risk of wildfires.

Suggested Citation

  • Susaeta, Andres & Carter, Douglas R. & Chang, Sun Joseph & Adams, Damian C., 2016. "A generalized Reed model with application to wildfire risk in even-aged Southern United States pine plantations," Forest Policy and Economics, Elsevier, vol. 67(C), pages 60-69.
    • Handle: RePEc:eee:forpol:v:67:y:2016:i:c:p:60-69
    DOI: 10.1016/j.forpol.2016.03.009
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    References listed on IDEAS

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    1. Gregory S. Amacher & Markku Ollikainen & Erkki A. Koskela, 2009. "Economics of Forest Resources," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262012480, April.
    2. Andrew Stainback, G. & Alavalapati, Janaki R.R., 2002. "Economic analysis of slash pine forest carbon sequestration in the southern U. S," Journal of Forest Economics, Elsevier, vol. 8(2), pages 105-117.
    3. Margaret Insley & Kimberly Rollins, 2005. "On Solving the Multirotational Timber Harvesting Problem with Stochastic Prices: A Linear Complementarity Formulation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(3), pages 735-755.
    4. Gjolberg, Ole & Guttormsen, Atle G., 2002. "Real options in the forest: what if prices are mean-reverting?," Forest Policy and Economics, Elsevier, vol. 4(1), pages 13-20, May.
    5. Englin, Jeffrey E. & Boxall, Peter C. & Hauer, Grant, 2000. "An Empirical Examination Of Optimal Rotations In A Multiple-Use Forest In The Presence Of Fire Risk," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(1), pages 1-14, July.
    6. Reed, William J., 1984. "The effects of the risk of fire on the optimal rotation of a forest," Journal of Environmental Economics and Management, Elsevier, vol. 11(2), pages 180-190, June.
    7. Gregory S. Amacher & Arun S. Malik & Robert G. Haight, 2005. "Not Getting Burned: The Importance of Fire Prevention in Forest Management," Land Economics, University of Wisconsin Press, vol. 81(2).
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    Cited by:

    1. Susaeta, Andres, 2020. "Implications of future risk of fusiform rust on optimal forest management of even-aged slash pine plantations," Forest Policy and Economics, Elsevier, vol. 116(C).
    2. Chang, Sun Joseph, 2020. "Twenty one years after the publication of the generalized Faustmann formula," Forest Policy and Economics, Elsevier, vol. 118(C).
    3. Rakotoarison, Hanitra & Loisel, Patrice, 2016. "The Faustmann model under storm risk and price uncertainty: A case study of European beech in Northwestern France," MPRA Paper 85114, University Library of Munich, Germany.
    4. Halbritter, Andreas & Deegen, Peter & Susaeta, Andres, 2020. "An economic analysis of thinnings and rotation lengths in the presence of natural risks in even-aged forest stands," Forest Policy and Economics, Elsevier, vol. 118(C).
    5. Susaeta, Andres, 2018. "On Pressler’s indicator rate formula under the generalized Reed model," Journal of Forest Economics, Elsevier, vol. 30(C), pages 32-37.
    6. Labbé, Rodrigo & Niklitschek, Mario & Contreras, Marco, 2023. "Effect of climate change on the land rent of radiata pine plantations in Chile: Site productivity and forest fires," Forest Policy and Economics, Elsevier, vol. 156(C).
    7. Susaeta, Andres & Adams, Damian C. & Gonzalez-Benecke, Carlos, 2017. "Economic vulnerability of southern US slash pine forests to climate change," Journal of Forest Economics, Elsevier, vol. 28(C), pages 18-32.

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