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Research article - Peer-reviewed, 2018

Estimating economic value of site quality for uncertain ecosystem service provision in Swedish forests

Gren, Ing-Marie; Amuakwa-Mensah, Franklin


As in other ecosystems, provision of ecosystem services from forests is uncertain because of stochastic weather conditions. In general, society is risk-averse, which means that factors increasing or decreasing the uncertainty in ecosystem services add a source of cost or value to society, measurement of which is lacking in the literature. This article suggests a method for calculating the impact of site-specific ecological conditions in Swedish forests on the economic value of uncertain ecosystem services in terms of timber and carbon sequestration. Applying econometric tools from economics and finance to time-series forest data in Sweden reveals that a site quality indicator adds positively to forest growth rate and decreases uncertainty in forest productivity and associated provision of ecosystem services. The importance of site quality is demonstrated by showing that a marginal increase in site quality can raise the economic value of timber and carbon sequestration by 9% and that neglecting uncertainty can underestimate the value of the contribution by 12%. These findings indicate that management practices improving site quality have the potential of raising the total economic value of forest ecosystem and stabilizing its volatility.


site quality; forest growth; timber; carbon sequestration; uncertainty; econometrics; Sweden

Published in

International Journal of Biodiversity Science, Ecosystem Services and Management
2018, volume: 14, number: 1, pages: 117 - 126

Authors' information

Swedish University of Agricultural Sciences, Department of Economics
Amuakwa-Mensah, Franklin (Amuakwa-Mensah, Franklin)
Swedish University of Agricultural Sciences, Department of Economics

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