A financial analysis of a white pine improvement cut in Ontario

Abstract

Standard tools of forestry economics are used to provide insights into the effects of an experimental improvement cut, designed to release understory white pine and initiate a shelterwood system. The economic criterion is to harvest when the present valued net benefits from forest stands are highest. This study shows that the improvement cut increased the present value of net benefits per hectare of treated stands compared to control stands. The results are highly sensitive to interest rates applied. The success of the treatment is due in part to the fact that the bulk of the costs are not incurred until the 55th year of the stands' lifespan, and hence are discounted significantly when total benefits are tallied. Key words: white pine release, pine mixed wood management forest economics