Research article - Peer-reviewed, 2020
The infinitely worried forest owner key biotopes and forest certification in a Faustmann model
Kriström, Bengt; Johansson, Per-OlovAbstract
In this note, we consider a case when a forestry property may lose its market value through "political risk", illustrated here by it being classified as containing a key biotope. If a key biotope is found on a forest property in Sweden, the wood is almost impossible to sell. We show how the Faustmann formula is modified in this case and identify a "balance sheet" effect and a shortened rotation period. The theory seems to have some empirical support, given observed changes in bank lending contracts and alleged changes in forester's behavior to reduce the "political risk".Published in
Journal of Forest Economics2020, volume: 35, number: 1, pages: 69-73
Authors' information
Centre for Environmental and Resource Economics (CERE)
Umeå University
Johansson, Per-Olov
Stockholm School of Economics
Swedish University of Agricultural Sciences, Department of Forest Economics
UKÄ Subject classification
Economics
Forest Science
Publication Identifiers
DOI: https://doi.org/10.1561/112.00000502
URI (permanent link to this page)
https://res.slu.se/id/publ/103247