Show simple item record

dc.contributor.authorHäring, Thomas W.en_US
dc.description.abstractThis study examines effects of unpredictable price fluctuations and possible catastrophic losses on the optimal site preparation intensity of un thinned loblolly pine plantations under the assumption of lisk aversion. It concentrates exclusively on financial motives and does not take non-market values and portfolio considerations into account. The results should be interpreted with these limitations in mind.

Two approaches are taken to compare site preparation intensities: a quasideterministic approach, where expected cash flows are discounted with risk-adjusted discount rates, and a stochastic approach, where probability functions of cash flows are used to maximize expected utility from net present values. The stochastic approach is further divided into non-adaptive scenarios and adaptive scenarios, where the investor can gather additional price information during the life of a stand to optimize the harvest decision. The adaptive management problem is solved with stochastic dynamic programming. For each possible harvest age, an optimal reservation price below which the forest landowner should not sell the stumpage is calculated.

The study shows that the use of a single risk-adjusted discount rate is generally inadequate to compare different management intensities. The stochastic approaches reveal that the optimal management intensity depends on the degree of risk aversion, with increasing risk aversion leading to a lower intensity level. Given the possibility of catastrophic losses, the adoption of a feedback harvesting policy strengthens the already dominant influence of risk aversion and does not generally lead to an increase in management intensity.

The study's results suggest that even if the landowner is managing the forest solely for financial reasons, some of the reluctance to invest in intensive forestry may not indicate a lack of interest or information but simply an economic reaction to risk, especially in regions with a high potential danger of catastrophic losses.

dc.publisherVirginia Techen_US
dc.subjectStochastic programmingen_US
dc.subject.lccLD5655.V856 1993.H373en_US
dc.titleOptimizing loblolly pine management with stochastic dynamic programmingen_US
dc.contributor.departmentForestryen_US Polytechnic Institute and State Universityen_US
dc.contributor.committeechairKlemperer, W. Daviden_US
dc.contributor.committeememberPeterson, Everett B.en_US
dc.contributor.committeememberSullivan, Jayen_US
dc.contributor.committeememberTaylor, Daniel B.en_US
dc.contributor.committeememberWisdom, Harold W.en_US

Files in this item


This item appears in the following Collection(s)

Show simple item record