Abstract
This study develops a utility maximization, infinite horizon forest rotation model that includes in situvalues and the forest owner's consumption–savings decision making. The value of forest land becomes owner-specific and depends on property rights related to in situbenefits. The length of the rotation period depends, e.g., on the wealth of the forest owner and may evolve in time. A forest owner with accumulating nonforest assets never continues harvesting forever. In contrast, with decreasing nonforest assets the rotation period converges toward the Faustmann solution. In a multiple-stand version of the model, the harvesting decisions regarding different stands are linked together via the budget constraint and the dependence of an individual stand's in situvalue on the age structure of the whole forest. Numerical simulation with two stands suggests that, within the class of concave in situvaluation functions, the optimal solution yields convergence toward forests with increasing heterogeneity of age structures.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
