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The Economics of Private Forest Management: Unifying the Faustmann Model and Models of Nonindustrial Private Forest Management

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  • Dave Dole

Abstract

The majority of forest land in the U.S. is owned by individuals and institutions that are not directly involved in the forest products industry. Much of this land is thought to be managed inefficiently, but the reasons for this are unclear. This article focusses on three possible factors: information and transactions costs; nonfinancial forest values; and liquidity constraints. Models for the reforestation and harvesting decisions are presented that incorporate these factors. These models use the Faustmann model to define the financial value of forest land, and borrow from previously developed models of nonindustrial private forest management to incorporate the other factors into the forest management decision. A wealth of data exists on nonindustrial private forest management, and discussion focusses in particular on models that are suitable for the study of existing data.

Suggested Citation

  • Dave Dole, 1995. "The Economics of Private Forest Management: Unifying the Faustmann Model and Models of Nonindustrial Private Forest Management," Others 9502001, University Library of Munich, Germany, revised 21 Feb 1995.
    • Handle: RePEc:wpa:wuwpot:9502001
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    References listed on IDEAS

    as
    1. Dennis, Donald F., 1990. "A probit analysis of the harvest decision using pooled time-series and cross-sectional data," Journal of Environmental Economics and Management, Elsevier, vol. 18(2), pages 176-187, March.
    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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    More about this item

    JEL classification:

    • P - Political Economy and Comparative Economic Systems
    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • Z - Other Special Topics

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