Journal of Forest Economics > Vol 16 > Issue 1

The optimal selective logging regime and the Faustmann formula

Angels Xabadia, Renan U. Goetz,
Suggested Citation
Angels Xabadia and Renan U. Goetz (2010), "The optimal selective logging regime and the Faustmann formula", Journal of Forest Economics: Vol. 16: No. 1, pp 63-82.

Publication Date: 0/1/2010
© 0 2010 Angels Xabadia, Renan U. Goetz
JEL Codes:C610C630Q230
Distributed optimal controlDensity effectsForest managementFaustmann ruleSelective logging


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In this article:
The model 
Considerations in the long-run 
Empirical study 


This study analyzes the optimal selective logging regime of a size-distributed forest where individual trees compete for scarce resources such as space, light, and nutrients. The decision problem of the forest manager is formulated as a distributed optimal control problem. The interpretation of the first-order conditions allows a generalization of the Faustmann formula. In an empirical part, this article numerically determines the optimal management regime of a size-structured forest and shows that the optimal selective logging regime is associated with a normal forest under a wider variety of situations than stated in the previous literature.