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Debunking the forest rent model fallacy in a fully regulated forest

Authors
  • Chang, Sun Joseph1
  • Chen, Yan2
  • Zhang, Fan1
  • 1 Louisiana State University Agricultural Center, Baton Rouge, LA, 70803-6202, USA , Baton Rouge (United States)
  • 2 Nanjing Forestry University, Nanjing, 210037, People’s Republic of China , Nanjing (China)
Type
Published Article
Journal
European Journal of Forest Research
Publisher
Springer Berlin Heidelberg
Publication Date
Dec 16, 2019
Volume
139
Issue
1
Pages
145–150
Identifiers
DOI: 10.1007/s10342-019-01240-z
Source
Springer Nature
License
Yellow

Abstract

In this paper, we first show both mathematically and empirically that the forest rent model is the wrong model to determine the optimal rotation age of a fully regulated forest as long as the standing timber has value. We then demonstrate that even if the forest is acquired for free, a fully regulated forest based on the forest rent model is actually worth more than the present value of its annual income. By converting to a fully regulated forest with a shorter rotation under the land expectation model, a higher present value of over 10% can be realized.

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