A general approach to the evaluation of nonmarket goods

The paper considers the evaluation of a nonmarket good on the basis of a complete conditional demand system. It introduces two conditions allowing to identify a generally unique underlying preference ordering which can be employed for evaluation. The functional structure of the corresponding expenditure/indirect utility function and the demand system is described. The conditions proposed turn out to be equivalent to the property of base level independence in the equivalence scale literature. The approach is operational.     

Economic analysis of exploitation and regeneration in plantations with problematic site productivity

Although intensive managed plantations clearly increase the growth and yield of forests several papers refer to declining forest productivity. Therefore in this paper we study the impact of declining forest productivity on the land expectation value and the optimal rotation length. We start from the research by Lu and Chang (1996) and try to fill the gap between the stable site productivity (“best”) and the site mining (“worst”) cases. For that we extend the classical Faustmann model by availability of different recovering technologies. In general the model allows the analysis of the two plantation groups: “mining the site by high productive plantation followed by management of degraded areas” and “high productive plantation and regeneration cycling” with the same comparative static. The model, analysis and comparison with the two extreme cases in Lu and Chang (1996) leads to a detailed understanding of land use management when site productivity decline is possible. Particularly the relation between declining periods with intensive land use and land use alternatives after declining periods with regeneration can be well understood. Findings are: Not ever declining process asks for regeneration. Many declining processes can be stopped at early times by high cash flows after mining periods. Shortenings of the regeneration time can boost site mining intensities.