Karl-Gustaf Löfgren

Supply consequences of subsidizing thinning activities in Sweden

This paper is an attempt to measure the supply consequences of the thinning subsidy which was in operation during the cutting season 1979/80. The econometric analyses are based on a questionnaire to a sample of 2500 private non‐industrial forest owners, which was produced by the official Swedish investigation SOU 1981:81. The analyses show that it is questionable whether the subsidy did affect the total cut. The estimates of the supply increase range from an average of zero to 122 m3/owner. As a by‐product we obtain estimates of the price elasticity of the private non‐industrial forest owners supply curve. These estimates range from 0.63 to 1.69.

On the Proper Treatment of Defensive Expenditures in “Green” NNP Measures

In many cases, individuals are able to affect the quality of the services they derive from the environment. Often it can be fruitful to view individuals as producing services using the environment as one of several inputs. One example is provided by recreational services such as visiting a ski slope or a fishing site. In these cases, private goods and factors such as petrol and time are inputs. There are also public good inputs such as the size and the quality attributes of the site. The individual uses these private and public inputs to produce a recreational experience.

Chapter 4 Recreational Values, Pareto Optimality and Timber Supply

Publisher Summary This chapter presents results from the theory of Lindahl equilibria in economies with public goods to the multiple use management of public (and private) forest land. One can treat the environmental services of standing trees as public goods and know the general equilibrium prices for public goods; one can then decentralize the social optimization problem by adding an environmental component to the ordinary present value problem. One point being that this component is linear in the case of stand variables, and the problem that the valuation of one stand depends on the states of others is automatically solved by the general equilibrium prices. A very difficult and essentially unsolved practical problem is to find the pseudo-equilibrium prices. To highlight the economic problems created in a situation where agents derive utility from the environmental services produced by the forest, and from the commercial values obtained through the timber harvest, the chapter introduces a very simple general equilibrium model.