Abstract
Existing decision support systems (DSS) do not account for forest owner heterogeneity, nor do they explicitly model the reaction of forest owners to policy. Hence, current DSS are suitable for response analysis, but much less useful for policy impact assessment or forecasting. The current study presents a theoretical model of harvesting behavior which provides the basis for a simulation model, Expected Value Asymmetries (EVA), useful for analyzing how timber supply and forest characteristics are affected when forest owners differ as to responsiveness to information, risk aversion, and patience as regards postponement of harvesting revenues. The simulation results clearly indicate that the model is well adapted for considering forest owner heterogeneity when assessing the impact of policy on the inter-temporal development of forest resources and timber market conditions. Finally, it is outlined how EVA could integrate forest owner specific harvesting behavior in an augmented Decision Support System (DSS), thus addressing the inability of DSS operational at pan-European level to model the interaction between policy and forest management decisions.
Highlights
A sizeable proportion of the forests in the European Union (EU) is in private hands [1], and private forest ownership is increasing in the forest-rich sub-regions of Central-East and Northern Europe [2]
The current study presents a theoretical model of harvesting behavior which provides the basis for a simulation model, Expected Value Asymmetries (EVA), useful for analyzing how timber supply and forest characteristics are affected when forest owners differ as to responsiveness to information, risk aversion, and patience as regards postponement of harvesting revenues
Departing from earlier studies using the Fisherian two-period consumption-saving-harvesting model [14,15,16,17,18,19,20], in particular Rinaldi and Jonsson [13], we develop a theoretical model of harvesting behavior when forest owners differ as to the receptiveness to information
Summary
A sizeable proportion of the forests in the European Union (EU) is in private hands [1], and private forest ownership is increasing in the forest-rich sub-regions of Central-East and Northern Europe [2]. An example is the EUwood study (Hamburg University 2010) where forest owner harvesting behavior was linked to forest holding size, so that small forest holdings were assumed to result in a smaller percentage of the theoretical wood supply being available. Another prominent example is the EFSOS II study [9] (UNECE/FAO), which provided so called policy scenarios—depicting the outcome for the European forest sector when the priority of forest management is given to different objectives—for the assessment of trade-offs facing policymakers. Just as was the case in the EUwood study, the pan-European forest resource assessment model EFISCEN [10] was used both to provide estimates of potential wood supply, in EFSOS II ingested as a constraint on the production of wood products in the economic forest sector model EFI-GTM [11], and to project the future state of the forests given assumptions of future wood demand and pre-specified management regimes
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