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Structural estimation of a dynamic model of joint production of timber and amenities

Author

Listed:
  • Jérôme Foncel

    () (Université Lille 3 Charles-de-Gaulle,)

  • Eric Kéré

    (Laboratoire d'Economie Forestière, INRA - AgroParisTech
    BETA, UMR 7522 CNRS/Univ. de Strasbourg/Univ. de Lorraine)

Abstract

Using a stochastic dynamic programming model we analyze how French private forest owners make inter-temporal trade-offs between non-timber amenities and timber income. We explicitly take into account the price expectations and forest growth. In addition, unlike previous empirical studies involving clear-cutting, we consider that the owner can make a partial cut. Our estimation results show that the willingness to pay for non-timber amenities is €23 in our case study. This value represents the difference between the amount an owner would earn if he maximized timber revenue and the revenue of their actual logging. Given the intention of the French government to develop the use of lumber, we show to which extent prices could be subsidized to increase production provided that private owners value amenities. In addition, the introduction of a tax on the stock for amenities could be used to increase timber production.

Suggested Citation

  • Jérôme Foncel & Eric Kéré, 2013. "Structural estimation of a dynamic model of joint production of timber and amenities," Working Papers - Cahiers du LEF 2013-04, Laboratoire d'Economie Forestiere, AgroParisTech-INRA, revised Jun 2013.
  • Handle: RePEc:lef:wpaper:2013-04
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    File URL: http://www6.nancy.inra.fr/lef/Cahiers-du-LEF/2013/2013-04
    File Function: First version, 2010
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    More about this item

    Keywords

    Forest economics; amenities; Indirect inference; stochastic dynamic programming.;

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry

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