Assessing the Non-Timber Value of Forests: A Revealed-Preference, Hedonic Model
Abstract
Based on revealed preference theory, the value of non-timber goods and services obtained by forest owners, private or public, should be at least equal to the difference between the value of what they could have cut had they tried to maximize timber revenues, and of what they actually cut. This definition was applied to estimate the non-timber value (NTV) of Forest Inventory and Analysis plots in the Wisconsin maple-birch forest type, with a Markov decision model to predict the decision that would have maximized the timber income. Then hedonic regression was applied to determine how the biophysical characteristics of stands and the socioeconomic setting influenced NTV. In the Wisconsin maple-birch forests, the NTV was highest for national forests: about $50 ha-1yr-1, ten times the timber revenues. The estimated NTV was similar for all non-national forests, at about $20 to $24 ha-1yr-1. For non-national public forests, NTVs were four times larger than timber revenues. They were almost twice as large as timber revenues for private non-industrial forests. Even for industry forests, NTVs were slightly higher than timber revenues. However, these NTVs could be biased due to constraints limiting the potential economic return from forest stands not reflected by the profit-maximizing model. The hedonic pricing model showed that stands with the same tree distribution had significantly higher NTVs for national forests, and similar NTVs for other ownership types. The marginal value of trees of various species and size was also different for national forests. At constant prices, from 1966 to 1984, the non-timber value of maple-birch forests in Wisconsin increased by 30% for national forests, and 55% for other forests.