Kriström, Bengt
- Department of Forest Economics, Swedish University of Agricultural Sciences
- Centre for Environmental and Resource Economics (CERE)
- Umeå University
Research article2020Peer reviewed
The infinitely worried forest owner key biotopes and forest certification in a Faustmann model
Kriström, Bengt; Johansson, Per-Olov
Abstract
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 Economics
2020, Volume: 35, number: 1, pages: 69-73
SLU Authors
UKÄ Subject classification
Economics
Forest Science
Publication identifier
DOI: https://doi.org/10.1561/112.00000502
Permanent link to this page (URI)
https://res.slu.se/id/publ/103247