Valuation of Forest Amenities: A Macro Approach
A method of estimating forest amenity value based on macroeconomic growth theory is presented. It relies on the assumption that more valuable forest amenities are provided by a forest with a more natural stand structure. We construct a forest naturalness index from stand data that provides a relative measure of the forest amenity provided regionally. This naturalness index is meant to assess the change in forest amenities over time. It is a measure of diversity within the allowable specimens (species/diameter/height) of the natural forest type and observed successional stage. We aggregate the fraction of maximum diversity of the natural forest type for the target successional profiles of the natural forest types of the survey unit to calculate the index for the region. The paper shows a specific form for the path over which aggregate consumption, including forest market goods, and forest amenities, as measured by our naturalness index, Revolve. This macroeconomic growth model assumes a trade-off between consumption growth and forest amenities. The present value of future consumption foregone by a marginal increase in the naturalness index is the shadow price of the forest amenity represented by the index increase. The value of any proposed forest policy change is the value of the index change that the new forest policy causes.