Adaptive and nonadaptive harvesting in uneven-aged beech forest with stochastic prices

Abstract

The economic impacts of various harvesting strategies in uneven-aged beech management in Denmark are analysed, using a matrix growth model and taking into account that sales prices fluctuate over time. A vector autoregressive (VAR(1)) model is estimated on the basis of price data 1957–1998 for various assortments and used for simulating price development and consequently the economic return. It is found that harvesting strategies containing a high proportion of large trees have higher mean sales revenue, but with bigger variance, than strategies with a more even diameter distribution. If single-tree management is applied, harvesting strategies with a high proportion of large trees are relatively insensitive to harvest intensity's influence on revenue and diameter distribution. It is also found that even drastic changes of harvesting strategy do not necessarily cause large fluctuations in future revenue, indicating flexibility with respect to harvest. The simulation model results in a large standing volume compared to cyclic management, especially for large dimensions. This gives an option value with respect to adaptation to changing prices, but it also implies high storage costs and thereby a smaller land expectation value (LEV). If harvest is adapted to price fluctuations, there is a potential gain of 11% in uneven-aged management from letting the harvest cycle vary between 5 and 15 years. This is similar to the gain known from even-aged management. Therefore, a possible higher gain from adaptation in uneven-aged management must be caused by the forest structure being less sensitive to changes in ecological conditions, not by the changed assortment portfolio.