Working Paper Series, Department of Forest Economics, Swedish University of Agricultural Sciences
Optimal Stocking Level and Harvesting with Stochastic Prices
() and Peichen Gong
Abstract: An integrated thinning and final harvesting strategy for
even-aged stand under conditions of uncertainty in future timber prices is
developed. This strategy consists of two parts: a feedback stocking-level
control function that guides the choice of thinning intensities at
different ages, and a reservation price function that determines the time
of final harvesting. Optimal stocking level is modelled as a function of
stand age and market timber prices. The reservation price function is
formulated using stand age and standing timber stock as independent
variables. The coefficients of the two functions are optimised
simultaneously for a sample stand of Scots pine (Pinus Sylvestris L.)
located in northern Sweden. The functions obtained are then used to
simulate the thinning and final harvesting decisions for the sample stand.
The integrated strategy is compared with a pure reservation price strategy
where no thinning is allowed, and with an open-loop harvesting strategy
that ignores timber price uncertainty.
Keywords: Even-aged stand, thinning, rotation age, adaptive harvest strategy, reservation price.; (follow links to similar papers)
28P, April 2002
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