Implications of the reservation price strategy on the optimal harvest decision and production of nontimber goods in an even-aged forest stand

Abstract

This study analyzes the effects of adopting an adaptive harvest strategy in even-aged forest management under timber price uncertainty on the production of nontimber goods. We use the reservation price strategy (“harvest when the observed timber prices are higher than the reservation prices”) on a longleaf pine (Pinus palustris Mill.) stand and employ the Faustmann–Hartman model as a benchmark. We assume that a longleaf pine stand can be managed for timber production, water production, carbon sequestration, and pine straw raking, depending on the planting density. Our results indicate that the reservation price strategy leads to longer expected harvest age when planting density is high. The reservation price strategy does not lead to increases in water production and carbon sequestration with low planting density. With high planting density, the reservation price strategy leads to increases in the amount of in situ carbon sequestered by 14.4–24.7 Mg·ha–1. Our findings suggest that managing longleaf pine forests in good- or poor-quality sites is a profitable alternative and enables water production and carbon sequestration.