Forestry Economics: Principles and Practice

This review discusses bioeconomic models of the forest and uses them to explore policy options for forest management. The main type of bioeconomic model used is based on a biomass model of the growth of the forest, similar to the biomass model widely used in fishery economics. However a more detailed model, similar to the cohort-based models of fish stocks, which simulates the growth of subsections of the forest is also referred to. The bioeconomic models are based on simple assumptions about prices and costs - mainly that the forest industry, as a small part of the economy, is a price taker in both output and input markets. The models were initially used to examine the harvesting policy which would maximise the net present value of the timber produced by the forest. However it was recognised that non-timber values are becoming increasingly important and must be accounted for in the development of an optimal forest strategy. Case Studies consider some of the issues raised in the paper in greater detail.