The forest rotation problem

As discussed in Chapter 6, the primary reasons for family forest landowners to own forestland are esthetics, privacy, recreation, and protecting nature. ¹ Near the bottom of reasons for forestland ownership is the generation of income from timber sales (Butler and Leatherberry 2004; Belin et al. 2005; Hagan et al. 2005; Butler 2008 and 2010). Nonetheless, these owners can still be considered as maximizers; that is, their behavior is consistent with maximizing the net value of their forestland ownership that includes timber and non-timber net values. ² One of the primary tools a landowner can use to manipulate forested ecosystems in a sustainable manner to produce timber and non-timber goods and services (e.g. water quality and quantity, recreation, wildlife, carbon storage, and mushrooms, etc.) is to cut trees according to a sustainable forest management plan. ³ To analyze a landowner's decision of when to cut their trees, I will start with a simple case assuming the primary reason for forestland ownership is income from timber sales. I will then relax this assumption to include other non-timber ownership goals and examine the impact on a landowner's cutting decision.