ABSTRACT
Public ownership of forest lands in the United States must be viewed as a market intervention of major importance considering that public agencies manage 482.5 million acres, or 28 percent, of the commercial forest land in this country (U.S. Department of Agriculture, Forest Service, 1982, p. 349). While there are well-established justifications for public ownership both in concept and in practice (see, for example, Krutilla and Eckstein [1958], pp. 41–58), this paper is concerned less with the justification than with the analysis of the impact of public ownership. The analysis itself is important because the literature thus far has not dealt with the critical issue of production costs. Our evaluation of the effects of public ownership, which suggests that there are differences in outcome depending upon the relative weight given to market-responsive or efficiency-based policies, invites inquiry into the implications of these differences for public management. Therefore, the primary question addressed here is whether regulations that restrict the responses of public land managers to market signals affect social welfare positively or negatively. A further question is whether these regulations improve distributive justice.
