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On Pressler’s indicator rate formula under the generalized Reed model

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  • Susaeta, Andres

Abstract

We extend the Pressler’s indicator rate formula under the generalized Reed model to account for the impacts of current and future stochastic disturbance risk on the current harvesting decision. We prove that that the mathematical framework of the Pressler’s indicator rate holds under the generalized Reed model. We apply it to the management of longleaf pine to determine the optimal harvest age under the risk of wildfires. We determine that the Pressler’s indicator rate formula provides a useful framework to determine the minimum timber salvage increment required to decide when to harvest longleaf pine under the risk of wildfire.

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  • 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.
    • Handle: RePEc:eee:foreco:v:30:y:2018:i:c:p:32-37
    DOI: 10.1016/j.jfe.2017.12.002
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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, December.
    2. 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.
    3. Loisel, Patrice, 2014. "Impact of storm risk on Faustmann rotation," Forest Policy and Economics, Elsevier, vol. 38(C), pages 191-198.
    4. Staupendahl, Kai & Möhring, Bernhard, 2011. "Integrating natural risks into silvicultural decision models: A survival function approach," Forest Policy and Economics, Elsevier, vol. 13(6), pages 496-502, July.
    5. Luis Diaz-Balteiro & David Martell & Carlos Romero & Andrés Weintraub, 2014. "The optimal rotation of a flammable forest stand when both carbon sequestration and timber are valued: a multi-criteria approach," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 72(2), pages 375-387, June.
    6. Gong, Peichen & Löfgren, Karl-Gustaf, 2010. "Did Pressler fully understand how to use the indicator per cent?," Journal of Forest Economics, Elsevier, vol. 16(3), pages 195-203, August.
    7. 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.
    8. 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).
    9. 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.
    10. Deegen, Peter & Matolepszy, Kai, 2015. "Economic balancing of forest management under storm risk, the case of the Ore Mountains (Germany)," Journal of Forest Economics, Elsevier, vol. 21(1), pages 1-13.
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    Cited by:

    1. 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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