Forest Land Conversion Over Time: Implications for the Faustmann Formula
Abstract:The Faustmann timber production model has been used to examine the allocation of land between alternative forest land use options. This article provides a clarification and extension of this previous work. We use the basic forest land use options model to allow for the changes in forestland use over time. First, we modify Faustmann's original assumptions to allow for a one-off change in prices or an initial allocation constraint, and examine the forest land manager's decision to switch to an alternative land use at some point in the future. Second, we look at the case where prices evolve over time and it is optimal for the forest land manager to switch between land uses on an equilibrium path. This second extension provides a new application of the Faustmann timber production model. We discuss the theoretical insights and the implications for forest conversion. FOR. SCI. 47(4):510–519.
Keywords: Forest land-use options; environmental management; forest; forest management; forest resources; forestry; forestry research; forestry science; land-use switching; natural resource management; natural resources
Document Type: Miscellaneous
Affiliations: 1: Department of Economics and Finance, University of Wyoming, P.O. Box 3985 Laramie, Wyoming, 82071-3985, Phone (307) 766 2546; Fax: (307) 766 5090 email@example.com 2: Department of Economics, University College, London, UK, Phone (01275) 798 436 firstname.lastname@example.org
Publication date: November 1, 2001
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