Application of the generalized Faustmann model to uneven-aged forest management

Chang, Sun Joseph; Gadow, Klaus von

doi:10.1016/j.jfe.2010.06.002

Cited by 33 publications

(21 citation statements)

References 15 publications

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“…While it was developed for clear-cuts of even-aged single species, authors have developed optimizations for uneven-aged stands [47], uneven-aged management [48], mixed-species forests [49], natural regeneration [48] and declining site productivity [50]. Non-timber forest values are increasingly assigned prices in decision making and integrated into the Faustmann model using joint production functions, notably for carbon sequestration [51,52].…”

Section: Forest Economics Land-use Modelsmentioning

confidence: 99%

Towards a Theoretical Construct for Modelling Smallholders’ Forestland-Use Decisions: What Can We Learn from Agriculture and Forest Economics?

Baker

Bull

Baylis

et al. 2017

Forests

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Academic research on smallholders' forestland-use decisions is regularly addressed in different streams of literature using different theoretical constructs that are independently incomplete. In this article, we propose a theoretical construct for modelling smallholders' forestland-use decisions intended to serve in the guidance and operationalization of future models for quantitative analysis. Our construct is inspired by the sub-disciplines of forestry and agricultural economics with a crosscutting theme of how transaction costs drive separability between consumption and production decisions. Our results help explain why exogenous variables proposed in the existing literature are insufficient at explaining smallholders' forestland-use decisions, and provide theoretical context for endogenizing characteristics of the household, farm and landscape. Smallholders' forestland-use decisions are best understood in an agricultural context of competing uses for household assets and interdependent consumption and production decisions. Forest production strategies range from natural regeneration to intensive management of the forest resource to co-jointly produce market and non-market values. Due to transaction costs, decision prices are best represented by their shadow as opposed to market prices. Shadow prices are shaped by endogenous smallholder-specific preferences for leisure, non-market values, time, risk, and uncertainty. Our proposed construct is intended to provide a theoretical basis to assist modellers in the selection of variables for quantitative analysis.

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Section: Forest Economics Land-use Modelsmentioning

confidence: 99%

Towards a Theoretical Construct for Modelling Smallholders’ Forestland-Use Decisions: What Can We Learn from Agriculture and Forest Economics?

Baker

Bull

Baylis

et al. 2017

Forests

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“…The Norway spruce management included the following silvicultural measures: planting (500 € ha -1 ), tending of the sapling stand (350 € ha -1 ), or precommercial thinning (350 € ha -1 ) and a ditch network maintenance combined with mounding (300 € ha -1 ). In the calculations of the BLV (Chang and Gadow 2010;Chang 2014), we applied the Faustmann rotation model (Faustmann 1849). The BLV was calculated as: where: BLV = bare land value of a spruce stand, € ha -1 R i = harvesting income in year i valued at stumpage, € ha -1 C ik = silvicultural cost k (k = 1, …, m) in year i s = rotation length for spruce stand, years r = rate of interest (here 1%, 2%, or 3%)…”

Section: Estimating Incomes Costs and Financial Performancementioning

confidence: 99%

From useless thickets to valuable resource? – Financial performance of downy birch management on drained peatlands

Niemistö¹,

Kojola²,

Ahtikoski³

et al. 2017

Silva Fenn.

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Highlights• The most profitable management regimes for pulpwood and energy wood production in dense downy birch stands on drained peatlands include no thinnings, but final cutting at the stand age of 40-45 years as whole-tree harvesting, or as integrated harvesting of pulpwood and delimbed energy wood stems about 10 years later depending on applicable harvesting method.• A competitive management regime is early precommercial thinning at 4 m dominant height to a density of 2500 stems per hectare and production of pulpwood with a rotation of 55-65 years. Equal profitability is achieved with or without traditional first thinning, which can thus be included for other reasons, for example to improve regeneration of spruce. AbstractDowny birch (Betula pubescens Ehrh.) stands on drained peatlands are often considered useless because they typically do not yield good-quality sawn timber. However, covering an area of ca. 0.5 million hectares and with total yields of up to 250 m 3 ha -1 , downy birch stands on peatlands in Finland have a potential for pulpwood and/or energy wood production. We examined the financial performance of alternative management regimes (with or without thinnings, different thinning intensities, several rotation lengths) combined with alternative harvesting methods (pulpwood, energy wood, or integrated, energy wood being delimbed stems or whole trees). We used data from 19 experimental stands, monitored for 20-30 years. For harvesting removals we considered both actual thinning removals and final-cutting removals with alternative timings that were based on the monitoring data. We assessed the profitability as a combination of the net present value of the birch generation and the bare land value of future generations of Norway spruce (Picea abies (L.) Karst.). The most profitable management was growing without thinnings until wholetree final cutting at the stand age of 40-45 years with an advanced multi-tree harvesting method. In contrast, the standard method in whole-tree final cutting resulted in the lowest profitability, and an integrated method with the energy wood as delimbed stems was the best of the standard methods. Thinnings were unprofitable especially when aiming to produce energy wood, whereas aiming for pulpwood, light precommercial thinning was competitive. Commercial thinning at the traditional "pulpwood stage" had little effect on profitability. The best stand age for final cutting was 40-65 years -earlier for very dense stands and whole-tree energy wood harvesting with advanced method, later for precommercially thinned stands and pulpwood harvesting.

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“…Seed). Therefore, a Faustmann rotation model was applied in calculation of bare land value (soil expectation value) [54,55]. Faustmann [56] based the calculation of optimal rotation on maximisation of the net present value (NPV) of an infinite chain of rotations.…”

Section: Financial Analysismentioning

confidence: 99%

Profitability of short-rotation biomass production on downy birch stands on cut-away peatlands in northern Finland

Jylhä

Hytönen

Ahtikoski

2015

Biomass and Bioenergy

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Application of the generalized Faustmann model to uneven-aged forest management

Cited by 33 publications

References 15 publications

Towards a Theoretical Construct for Modelling Smallholders’ Forestland-Use Decisions: What Can We Learn from Agriculture and Forest Economics?

Towards a Theoretical Construct for Modelling Smallholders’ Forestland-Use Decisions: What Can We Learn from Agriculture and Forest Economics?

From useless thickets to valuable resource? – Financial performance of downy birch management on drained peatlands

Profitability of short-rotation biomass production on downy birch stands on cut-away peatlands in northern Finland

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