Analysing norwegian forest management using an optimal harvesting rule
Norwegian forest management was investigated empirically through estimating an optimal harvesting rule stepwise with a growth function, for both a pooled and a panel data model. Norwegian forest management implied an average annual rate of return within the interval 2.5–3.7%. The rate of return required from forest investments was low compared with alternative investment options. The results were consistent with observed forest management and were probably influenced by forest owners' time and risk preferences. Furthermore, the required rate of return from investments in forestry was probably affected by public policies, e.g. public subsidy programmes and tax legislation. The results may also imply that forest owners maximized the total benefit from their forests, and not exclusively profits from industrial roundwood production.
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Document Type: Research Article
Affiliations: Department of Ecology and Natural Resource Management, Agricultural University of Norway, P.O. Box 5003, NO-1432 Ås, Norway
Publication date: 2004-12-01