The decision to conserve or harvest old-growth forest

The decision to harvest or conserve old-growth forest is formulated as a stochastic decision problem in continuous time. Uncertainty in future amenity values for standing forest and in future timber revenues for harvested forest are included in the model, along with the risk of catastrophic destruct...

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Bibliographic Details
Published in:Ecological economics 1993-08, Vol.8 (1), p.45-69
Main Author: Reed, William J.
Format: Article
Language:English
Subjects:
BOSQUES
CORTA DE APROVECHAMIENTO
COUPE DE PRODUCTION
DECISION MAKING
Forest management
FOREST PROTECTION
FORESTS
FORET
PRINCIPAL FELLING
PRISE DE DECISION
PROTECCION FORESTAL
PROTECTION DE LA FORET
Resource conservation
TOMA DE DECISIONES
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Summary:The decision to harvest or conserve old-growth forest is formulated as a stochastic decision problem in continuous time. Uncertainty in future amenity values for standing forest and in future timber revenues for harvested forest are included in the model, along with the risk of catastrophic destruction by fire, pest infestation, etc. It is shown how the decision problem can be expressed as an optimal stopping problem which can be solved analytically. The optimal decision rule is shown to depend on how the ratio of current timber value to the current expected present value of amenity benefits foregone through harvesting compares with some critical level. The effects of changes in uncertainty and other parameters on the optimal rule are discussed. Also it is shown how the cost-benefit analysis and certainty-equivalence procedures lead to premature harvesting, and the expected loss in survival time for these sub-optimal procedures is calculated.
ISSN:0921-8009
1873-6106
DOI:10.1016/0921-8009(93)90030-A