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When to harvest? The effect of disease on optimal forest rotation

Author

Listed:
  • Morag F. Macpherson

    (Computing Science and Mathematics, University of Stirling)

  • Adam Kleczkowski

    (Computing Science and Mathematics, University of Stirling)

  • John Healey

    () (School of Environment, Natural Resources and Geography, Bangor University)

  • Nick Hanley

    () (Department of Geography and Sustainable Development, University of St. Andrews)

Abstract

Effective forest management is crucial to maximising the economic benefits obtained from forests. However, the arrival of novel pests and pathogens may have a negative effect on timber values. We argue that management strategies should be calibrated to consider the effect of disease and in this paper explore the optimal rotation length of a single rotation, even-aged, plantation forest under varying disease conditions. We show that the optimal rotation length, which maximises the net present value of the forest, is reduced when disease decreases the timber value. Moreover, an increase in the rate of disease progression or the effect of disease on timber has a negative effect on the optimal rotation length. More generally, the effect of forest disease on optimal management depends in a complex way on the interaction of economic, ecological and epidemiological parameters

Suggested Citation

  • Morag F. Macpherson & Adam Kleczkowski & John Healey & Nick Hanley, 2015. "When to harvest? The effect of disease on optimal forest rotation," Discussion Papers in Environment and Development Economics 2015-19, University of St. Andrews, School of Geography and Sustainable Development.
    • Handle: RePEc:sss:wpaper:2015-19
    as

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    File URL: http://www.st-andrews.ac.uk/media/dept-of-geography-and-sustainable-development/pdf-s/DP%202015%2019.Macpherson%20et%20al.pdf
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    References listed on IDEAS

    as
    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, September.
    2. Alvarez, Luis H.R. & Koskela, Erkki, 2006. "Does risk aversion accelerate optimal forest rotation under uncertainty?," Journal of Forest Economics, Elsevier, vol. 12(3), pages 171-184, December.
    3. Price, Colin, 2011. "When and to what extent do risk premia work? Cases of threat and optimal rotation," Journal of Forest Economics, Elsevier, vol. 17(1), pages 53-66, January.
    4. 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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    8. Markku Ollikainen & Erkki Koskela, 2001. "Optimal Private and Public Harvesting under Spatial and Temporal Interdependence," CESifo Working Paper Series 452, CESifo.
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    More about this item

    Keywords

    harvest; forestry disease;

    JEL classification:

    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry

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