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Economics of rotation and thinning revisited: the optimality of clearcuts versus continuous cover forestry
- Tahvonen, Olli
- Forest policy and economics 2016 v.62 pp. 88-94
- clearcutting, forests, harvesting, income, models, natural regeneration, prices, stumpage, uneven-aged management
- A continuous time-economic model for optimal thinning and rotation is modified to include natural regeneration. The respecified model is capable of describing both optimal forest rotation and continuous cover forestry (uneven-aged management). Continuous cover forestry is shown to be optimal if the preset value of continuous sustainable harvesting income over an infinite horizon is higher than the clearcut revenue and the highest possible value of bare land. Negative bare land value implies optimality of continuous cover forestry but only if clearcut stumpage prices are not higher than thinning stumpage prices. Given low interest rate optimized thinning is shown to increase rotation length.