Integrating natural risks into silvicultural decision models: A survival function approach

Staupendahl, Kai; Möhring, Bernhard

doi:10.1016/j.forpol.2011.05.007

Cited by 39 publications

(17 citation statements)

References 15 publications

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“…Thereafter, [Reed, 1984] has studied the optimal forest rotation in continuous time with the risk of fire. [Thorsen and Helles, 1998] analyzed endogenous risk, More recently concerning natural risk, [Staupendahl and Möhring, 2011] studied the impact of risk on the expected value of a Spruce stand for various hazard rate functions, [Loisel, 2011] examined the impact of density dependence growth on optimal cutting age. [Price, 2011] focused on the validity of using the rate of physical risk, added to the discount rate as a new adjusted discount rate.…”

Section: Introductionmentioning

confidence: 99%

Impact of storm risk on Faustmann rotation

Loisel

2014

Forest Policy and Economics

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Global warming may induce in Western Europe an increase in storms. Hence the forest managers will have to take into account the risk increase. We study the impact of storm risk at the stand level. From the analytical expressions of the Faustmann criterion and the Expected Long-Run Average Yield, we deduce in presence of storm risk the influence of criteria and of discount rate in terms of optimal thinnings and cutting age. We discuss the validity of using a risk adjusted discount rate (a rate of storm risk added to the discount rate) without risk to mimic the storm risk case in terms of optimal thinnings

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Section: Introductionmentioning

confidence: 99%

Impact of storm risk on Faustmann rotation

Loisel

2014

Forest Policy and Economics

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“…The reasons of these dissimilar findings are, as opposite to our study, in the case of the former, the incorporation of fixed costs of intermediate treatments to prevent wildfires and the exclusion of uncertainty in timber prices; and in the case of the latter, the incorporation of early thinnings due to storm risk leaving less standing trees. Staupendahl and Möhring (2011) claimed that the timing of risk determines the length of the rotation; early/late risk extends/ shortens the optimal rotation age.…”

Section: Discussionmentioning

confidence: 99%

Optimal harvest strategy for even‐aged stands with price uncertainty and risk of natural disturbances

Susaeta

Gong

2019

Natural Resource Modeling

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We present a reservation price model to examine the joint impacts of natural disturbances and stumpage price uncertainty on the optimal harvesting decision for even‐aged forest stands. We consider a landowner who manages a loblolly pine stand to produce timber and amenities, under age‐dependent risk of wildfires and uncertainty in future timber prices. We show that the incorporation of risk of wildfires decreases the optimal reservation prices. The inclusion of risk of wildfires leads to lower land values and reduces the mean harvest age compared with the case of no‐risk of wildfires. Higher economic gains are obtained with the reservation price strategy compared with the deterministic rotation age model—a difference in the land value of $2,326 ha−1 (21%) between the two approaches. Recommendations for Resource Managers Our adaptive harvest strategy shows that the incorporation of risk of wildfires decreases the optimal reservation prices compared with the case of no‐risk of wildfires. Low reservation prices—a price that makes the landowner indifferent between harvesting or waiting longer—result in lower economic benefits for landowners and potential conversions of lands to nonforest use. Forest management practices oriented to reduce the effects of catastrophic disturbances, for example, creating a more complex forest structure with different stand densities, become imperative to ensure the sustainability of forestlands in the US South. Our analysis also suggests that the valuation of forestry investments should consider not only the risk of catastrophic events but also uncertainty in future timber prices. Higher appraisals of land value are obtained when timber price uncertainty is explicitly recognized, providing financial incentives for landowners to invest in forestry.

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“…A detailed description accompanies the results in Table 1 (Appendix). Staupendahl and Möhring (2011) have outlined the advantages of this approach for supporting decision-making in forest management. First, age-dependent survival probability can be directly transferred into the conditional dropout probability of a stand, which has survived until a certain age class.…”

Section: Modelling Tree Survivalmentioning

confidence: 99%

“…Simulation began at age 0, assuming bare land, reflecting the assumed situation at the example site and following the basic assumptions of Faustmann for the Land Expectation Value (LEV) (Faustmann 1849). The respective survival probability derived from the statistical model was translated into conditional dropout probability (according to Staupendahl and Möhring (2011)), which was then implemented into the simulation through a binomial distribution of failure or no failure at the end of each age class . In the case of undamaged stands, returns from regular thinning and regular harvest (at end of rotation period T) were simulated for each point in time t. In case of a simulated hazard, return from timber sales was reduced by 50% according to Dieter et al (2001).…”

Section: Deriving Return Distributionsmentioning

confidence: 99%

“…Empiric survival functions of tree species have a particular appeal for integration into bio-economic decision models, to account for probability of stand failure (Burkhardt et al 2014;Deegen and Matolepszy 2015;Staupendahl and Möhring 2011) and to estimate risk costs (Möllmann and Möhring 2017). These studies have mostly focused on adaptation strategies related to optimal rotation periods of single species.…”

Section: Introductionmentioning

confidence: 99%

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