Economic analysis of forest management with a long rotation period and a small labor input (I) Behavior of forest owners about an increase in real wage rates

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Abstract

This paper examines the influence of an increase in real wage rates on the rotation period and on the labor input, both of which are important input factors for forest management. First, profit functions were formulated around the Net Maximum Sustained Yield (NMSY) rule, the Internal Rate of Return (IRR) rule, the Fisherian rule, and the faustmann rule. Second, under the assumption that these profit functions are strongly concave, comparative statics were developed. The results were as follows: an increase in real wage rates 1) increases the optimal rotation period in the case of the IRR rule, 2) decreases the optimal labor input in the case of the Fisherian rule, and 3) causes at least one of the above results in the case of the NMSY and the faustmann rules.

Original languageEnglish
Pages (from-to)69-72
Number of pages4
JournalTHE JOURNAL of THE JAPANESE FORESTRY SOCIETY
Volume73
Issue number6
Publication statusPublished - 1991 Jan 1
Externally publishedYes

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wage rates
economic analysis
wage
profits and margins
forest management
labor
rate

ASJC Scopus subject areas

  • Forestry

Cite this

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title = "Economic analysis of forest management with a long rotation period and a small labor input (I) Behavior of forest owners about an increase in real wage rates",
abstract = "This paper examines the influence of an increase in real wage rates on the rotation period and on the labor input, both of which are important input factors for forest management. First, profit functions were formulated around the Net Maximum Sustained Yield (NMSY) rule, the Internal Rate of Return (IRR) rule, the Fisherian rule, and the faustmann rule. Second, under the assumption that these profit functions are strongly concave, comparative statics were developed. The results were as follows: an increase in real wage rates 1) increases the optimal rotation period in the case of the IRR rule, 2) decreases the optimal labor input in the case of the Fisherian rule, and 3) causes at least one of the above results in the case of the NMSY and the faustmann rules.",
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N2 - This paper examines the influence of an increase in real wage rates on the rotation period and on the labor input, both of which are important input factors for forest management. First, profit functions were formulated around the Net Maximum Sustained Yield (NMSY) rule, the Internal Rate of Return (IRR) rule, the Fisherian rule, and the faustmann rule. Second, under the assumption that these profit functions are strongly concave, comparative statics were developed. The results were as follows: an increase in real wage rates 1) increases the optimal rotation period in the case of the IRR rule, 2) decreases the optimal labor input in the case of the Fisherian rule, and 3) causes at least one of the above results in the case of the NMSY and the faustmann rules.

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