Risk-efficient species–site selection decisions for southern pines

Abstract

Selecting the correct tree species to plant on a site is crucial to the investment returns from the final stand. Species-selection decisions based on average investment performance do not account for risk, however. Mean-variance and stochastic dominance analysis can be used to select risk-efficient investment alternatives by comparing distributions of returns. A 20-year-old species comparison trial consisting of loblolly (Pinustaeda L.), slash (Pinuselliottii Engelm.), and longleaf (Pinuspalustris Mill.) pines established in the West Gulf was analyzed to determine which species were risk efficient on dry, wet, and intermediate sites. Distributions of net present values for each species were compared. Longleaf pine was found risk inefficient by first-degree stochastic dominance and mean-variance dominance on all sites. Slash was second-degree stochastic dominant and mean-variance dominant to loblolly pine on wet sites. Both slash and loblolly pines were second-degree stochastic efficient on intermediate and dry sites. A sensitivity analysis of stumpage prices is presented, and factors that may influence the results of the analysis, such as measurement age and site preparation method, are discussed.