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Research article - Peer-reviewed, 2005

Adaptive thinning strategies for mixed-species stand management with stochastic prices

Lu FD, Gong PC

Abstract

This paper presents an efficient and flexible approach of determining optimal thinning strategies for mixed-species stands with stochastic timber prices. The approach aims to determine the optimal stock of each species to be maintained in the stand conditional on the observed stand state and timber prices, whereas thinning intensity is given by the difference-between the existing and the optimal stocks. For demonstration purpose, the approach is applied to determine the optimal thinning strategies for an example stand of Scots pine (Pinus Sylvestris L.) and Norway spruce (Picea abies L. Karst.) in northern Sweden. The optimal stock of each species is formulated as a parametric function of stand age and stumpage prices of the respective species. A reservation price function is constructed to determine the optimal time of clearcut based on the observed stand state and timber prices. The parameters of the optimal stock-level and reservation price functions are determined by maximizing the expected present value of the stand. The results indicate that using the optimal stock-level function approach can significantly improve the thinning decisions for mixed species stand with stochastic timber prices. (c) 2005 Elsevier GmbH. All rights reserved

Published in

Journal of Forest Economics
2005, Volume: 11, number: 1, pages: 53-71
Publisher: ELSEVIER GMBH, URBAN & FISCHER VERLAG

    SLU Authors

      • UKÄ Subject classification

      Forest Science
      Economics and Business
      Social Sciences

      Publication Identifiers

      DOI: https://doi.org/10.1016/j.jfe.2005.02.003

      Permanent link to this page (URI)

      https://res.slu.se/id/publ/5795