ABSTRACT
This paper presents a stylized spatial-intertemporal model for the economic management of tropical forests, a model that reflects ecological constraints, especially spatial interactions across plots and the irreversibility of some uses. The explicit recognition of the varied uses of forested land, spatial interdependence, irreversibility, and uncertainty leads to optimal patterns that have different structures and, in general, more forested area than those recommended by traditional models. Two “flexible” land uses and one spatial interaction term contribute to the quasi-option value. The spatial-intertemporal framework permits examination of important issues such as sustainability, forest fragmentation, and land recovery dynamics. © 1996 Academic Press, Inc.
