Working Paper Series,
Swedish University of Agricultural Sciences, Department Economics

Abstract: The impact of biodiversity on forest ecosystem function and provision of ecosystem services has been investigated by many studies, but not the stability in these impacts. This paper calculates the effect of a fungi indicator, forest site quality, on standing volume and variability in forest growth in different forest regions in Sweden. We account for management practices, make use of time series data for a period of approximately 50 years, and estimate forest growth functions totally and for different regions in Sweden. Uncertainty is calculated as the conditional variance in forest growth rate, and the biodiversity indicator together with management practices are used as explanatory variables. Fully modified OLS is used to account for serial correlation and non-stationarity in the variables. The results show that the fungi diversity indicator adds positively to forest growth and growth rate, but increases uncertainty in the growth rate.

Keywords: fungi diversity; site quality; forest growth; variability; econometrics; Sweden

JEL-codes: Q23; Q57; Q59

40 pages, June 30, 2016

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