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Implicit Valuation of Non-Market Benefits in Even-Aged Forest Management

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  • David Dole

Abstract

Choosing the optimal harvesting time in multiple-use, even-aged forest management is an important but difficult problem. The usual formulation of the problem requires explicit knowledge of the value of the timber, plus the value of the other, non-timber and mainly non-market values. The latter are notoriously difficult to measure. This paper develops a harvesting rule that depends only implicitly on the flow of non-market values. The rule, dubbed the “implicit value formula,” gives the minimum stream of non-market values that would induce a landowner to adopt a given rotation length. Since harvesting decisions must be made with or without information on non-market values, the implicit value formula can provide guidance to forest managers by putting a lower bound on the non-market values for every rotation length. As a demonstration, implicit non-market values are calculated for Douglas fir. The implicit value formula indicates that preserving a forest of Douglas fir beyond the optimal rotation is much more expensive than harvesting it an equivalent length of time before the optimal rotation. Copyright Kluwer Academic Publishers 1999

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  • David Dole, 1999. "Implicit Valuation of Non-Market Benefits in Even-Aged Forest Management," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 13(1), pages 95-105, January.
    • Handle: RePEc:kap:enreec:v:13:y:1999:i:1:p:95-105
    DOI: 10.1023/A:1008241919453
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    References listed on IDEAS

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    1. Samuelson, Paul A, 1976. "Economics of Forestry in an Evolving Society," Economic Inquiry, Western Economic Association International, vol. 14(4), pages 466-492, December.
    2. Hartman, Richard, 1976. "The Harvesting Decision When a Standing Forest Has Value," Economic Inquiry, Western Economic Association International, vol. 14(1), pages 52-58, March.
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    Cited by:

    1. Zhou, Mo, 2017. "Valuing environmental amenities through inverse optimization: Theory and case study," Journal of Environmental Economics and Management, Elsevier, vol. 83(C), pages 217-230.
    2. 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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    Keywords

    Faustmann formula; optimal rotation;

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