Mixed forests and a flexible harvest policy: a problem for conventional risk analysis?

Berlin

2006

S. 303-315

10 Abb., 6 Tab., 40 Lit. Ang.

Artikel aus einer ZeitschriftUnselbständiges Werk

200136575

The famous 'Faustmann' equation, which allows for identifying the most profitable tree species on a given unstocked piece of land, assumes constant timber prices. In reality, timber prices may fluctuate dramatically. Several authors have proven for monocultures that waiting for an acceptable timber price (reservation price) before harvesting (flexible harvest policy) increases the net present value of forest management. The first part of this paper investigates how efficient a flexible harvest strategy may be applied in mixed forests and whether the optimal species mixture is changed under such harvest policy. Mixtures of the conifer Norway spruce [Picea abies (L.) Karst] and the broadleaf European beech (Fagus sylvatica L.) were investigated. In order to evaluate mixed forests, the risks and the correlation of risks between tree species as well as the attitude towards risk of the decision-maker (risk-aversion is assumed) were considered according to the classical theory of optimal portfolio selection. In the second part we took up a recent critique on modern financial theory by Mandelbrot. Whether or not the assumption of normally distributed financial flows, which are supposed to occur under risk, would be appropriate to evaluate the risk of forest management was investigated. Market and hazard risks as well as their correlation were integrated in the evaluation of mixed forests by means of Monte-Carlo simulations (MCS). The risk of the timber price fluctuation was combined with the natural hazard risk, caused mainly by insects, snow and wind. Applying the micro-?-rule, the mean net present value (NPV) from 1,000 simulations and their standard deviation were used for the optimisation. Given a low-return, risk-free interest rate to assess potential species mixtures of the Norway spruce and European beech, optimal proportions of European beech increased according to the theory of optimum portfolio selection with growing risk aversion from 0 (ignorance of risk) to 60% (great risk-aversion). In relation to a fixed harvest policy, the net present value of both, Norway spruce and European beech, could be increased significantly.