Current issue: 56(2)

Under compilation: 56(3)

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Silva Fennica 1926-1997
Acta Forestalia Fennica

Articles containing the keyword 'income'

Category: Article

article id 5244, category Article
Juha Lappi, Markku Siitonen. (1985). A utility model for timber production based on different interest rates for loans and savings. Silva Fennica vol. 19 no. 3 article id 5244.
Keywords: linear programming; timber production; forest economics; income from fellings; utility model; income flow; present discounted value
Abstract | View details | Full text in PDF | Author Info

The paper discusses the evaluation of timber production policies with different income (timber drain) schedules. Special attention is given to the temporal smoothness of the income flow. A utility model is formulated in which the objective is to maximize a fixed consumption pattern, and money can be saved and borrowed at different interest rates. We thus have smoothness requirements only for consumption, the capital market then determines the smoothness of the optimal income flow. Present discounted value and maximization of even income flow criteria are special cases of the utility model. Consumption can be maximized by linear programming. A sample problem is presented.

The PDF includes a summary in Finnish.

  • Lappi, E-mail: jl@mm.unknown (email)
  • Siitonen, E-mail: ms@mm.unknown
article id 5051, category Article
Aili Tuimala. (1979). Kuusen lahon aiheuttamista puutavaralajisiirtymistä ja kantohintamenetyksistä. Silva Fennica vol. 13 no. 4 article id 5051.
English title: Changes in timber assortments and loss in stumpage prices caused by decay in growing Norway spruce timber.
Original keywords: kuusi; kuitupuu; puukauppa; tukkipuu; laho; puutavaralaji; tulonmenetys; puutavaralajisiirtymä
English keywords: Norway spruce; Picea abies; pulpwood; decay; timber; timber assortments; loss of income
Abstract | View details | Full text in PDF | Author Info

Material for this study was collected from 26 stands marked for clear cutting in Southern Finland. The volume of decayed Norway spruce (Picea abies (L.) H. Karst.) timber and pulpwood was determined by deducting the volumes of these assortments (as recorded on the measurement certificate) from the volume of the standing trees. To obtain the economic loss, the volume of decayed wood was multiplied by the difference in stumpage prices between spruce timber of pulpwood and pine pulpwood. In the 17 stands of Buyer A the loss in timber volume caused by decay was 5.84% and the loss in stumpage price 2.84 Fmk/m3 (means weighted by volume). The corresponding figures in the 9 stands of Buyer B were 10.87% and 5.50 Fmk/m3, respectively.

At the mean stumpage price level for the felling season 1977-78 the losses in the stands m.f.c. mentioned above were 2.87% per unit price in the stands of Buyer A and 5.75% in the stands of Buyer B.

The PDF includes a summary in English.

  • Tuimala, E-mail: at@mm.unknown (email)
article id 4996, category Article
Mikko Raatikainen. (1978). Puolukan sato, poiminta ja markkinointi Pihtiputaan kunnassa. Silva Fennica vol. 12 no. 2 article id 4996.
English title: The berry yield, picking, and marketing of Vaccinium vitis-idaea in the commune of Pihtipudas, Central Finland.
Original keywords: puolukka; marjanpoiminta; puolukkasato; Pihtipudas; luonnonmarjat; luonnonmarjojen kauppa
English keywords: cowberry; Finland; Vaccinium vitis-idaea; lingonberry; berry yield; income; sale of berries
Abstract | View details | Full text in PDF | Author Info

A study on the lingonberry (Vaccinium vitis-idaea L.) was made in 1976. The berry yield was studied by picking along 17 lines, each 1,000 m long. The picking and use of lingonberry were studied by an inquiry addressed to the families engaged in such an occupation. The marketing of the lingonberry was investigated by interviewing purchasers, and by means of reports based on purchasing certificates of the purchacers. The total yield of lingonberry in Pihtipudas was 1.2 million kg or 18 kg per hectare of productive forest. Only 7% of the total yield of the berry was picked. 47% of the lingonberries picked were used by the families themselves, 48% were sold and 5% were used for other purposes. The families who sold lingonberries earned, on an average, 350 Fmk.

The PDF includes a summary in Finnish.

  • Raatikainen, E-mail: mr@mm.unknown (email)
article id 4857, category Article
Antti Lappalainen. (1971). Metsät ja verot. Silva Fennica vol. 5 no. 4 article id 4857.
English title: Forests and taxation in Finland.
Original keywords: metsätalous; metsäverotus; verotus; Suomi; pinta-alavero; tuloverotus
English keywords: forestry; Finland; forest taxation; area taxation; tax on income; gross income from timber sales
Abstract | View details | Full text in PDF | Author Info

There is no clear picture in Finland of how big the revenues are that the State and the local authorities receive from taxation for the part of primary forestry. Conception of taxation varies from 100% to 50%. The paper presents a comparison between the gross income from timber sales as determined according to the method used at the Central Statistics Bureau and the net revenues as calculated on the basis of forest fee.

At 1920s area taxation was introduced in forest taxation. The system is based on forest types and their timber production capacity. According to the principles of area taxation, no tax is paid for overcuts, whereas timber capital savings should be paid for.

According to the calculations of this study, in 1958–62 the gross income from timber sales was about 506 million Fmk annually in Southern Finland, the costs involved in timber production about 437 million Fmk, and the annual taxable income 231 million Fmk. In the period more valuable timber assortments were harvested than those for which taxes were paid according to the old regulations.

Half a century ago, area taxation was a system suited to its purpose. Now, however, forestry is in the hands of another generation, and accounting has been introduced in practical agriculture and forestry. Therefore, a taxation system based on the real income from timber growing should be introduced. The transition period could even be relatively short. It seems probable that a forest owner does not sell timber at a time when this would be required by silvicultural aspects in order to avoid income taxation, he should have to be present an acceptable working plan.

The PDF includes a summary in English.

  • Lappalainen, E-mail: al@mm.unknown (email)
article id 4702, category Article
Matti Halmekoski. (1961). Kääpiöviljelmäväestön ansiomahdollisuudet tilojen alueittaisen sijainnin valossa. Silva Fennica vol. 0 no. 108 article id 4702.
English title: The earning opportunities of the population of small farms as reflected in their regional location.
Original keywords: metsätalous; maatalous; asutus; maatilat; pientilat; 1950-luku; elinolot; kääpiöviljelmät; pienviljelijät; tulot
English keywords: forestry; Finland; agriculture; settlement; farms; small farms; income; living conditions
Abstract | View details | Full text in PDF | Author Info

Finnish legislation concerning settlement states that a farm should be able to provide, according to the various local conditions, their owners together with their families possibilities for a) living based on agriculture and forestry, b) part of their living the bulk of it acquired outside the farm, or c) part of their living from the garden, and possibly part of it by livestock, in addition to from work outside the farm. The present analysis discusses the earning opportunities of the inhabitants of small farms, characterized by the fact that generally they are not able to ford their owners living obtained principally from agriculture and forestry.

According to the results of the 1950 General Agricultural Census of Finland, there exists in the country 74,134 holdings the size of 0.5–1.99 ha (dwelling farms), and 99,400 holdings the size of 2–4.99 ha (dwelling-and-cultivation farms). These small farms accounted for 37.2% of all farms in Finland. As a rule, it is possible to run a small farm only in such region, where favourable conditions give possibilities both for farming and for sufficient amount of wage-earning work outside the farm. Thus, location has a big influence on the financial status.

Dwelling farms were common in urban municipalities and near the coastal areas. Those situated in countryside were located in Eastern and Northern Finland. Dwelling-and-cultivation farms were few in the coastal regions, but they predominated the municipalities of the watershed districts near Jyväskylä, and eastern and northern parts of the country. The forests of the small farms were too small to provide additional income to the farms. Farms owning relatively larger forest areas were situated in the counties of Lapland, Oulu, Mikkeli and Kuopio, and farms with little forests in Turku and Pori County. Net out-migration has been substantial in the districts with a relatively large number of small farms.

The PDF includes a summary in English.

  • Halmekoski, E-mail: mh@mm.unknown (email)
article id 4670, category Article
Maatalousväestön taloudellista asemaa selvittävä komitea. (1957). Maatalousväestön taloudellista asemaa selvittävän komitean mietintö. 2. Käsittelee pääasiassa metsä- ja sivuansiotuloja. Silva Fennica vol. no. 91 article id 4670.
English title: Proceedings of the committee on economic status of the Finnish agricultural population.
Original keywords: komiteanmietinnöt; metsätyö; metsätulot; maatalousväestö
English keywords: private forestry; forest work; rural population; forest income; farm economy
Abstract | View details | Full text in PDF | Author Info

The Finnish Government appointed a committee in 1955 to analyse the economic status of the population living from agriculture. The present paper contains Part II of the proceedings of this committee. It discusses the earnings of the agricultural population from forestry and occasional work.

Agricultural population was defined as all people living from holdings of at least 2 hectares of agricultural land. Forestry income includes, besides the value of stumpage sold, earnings from logging in connection with delivery contracts. Earnings from occasional work include wages for logging made to the account of someone else, as well as wages for agricultural work, floating, carpentry, road construction and maintenance work etc.

In 1951–1954, the farms in Finland received an average aggregate of 29 milliard Fmk for stumpage, 10 milliard Fmk of which consists of the value assigned to the timber consumed by the farms themselves. The average income from stumpage was 110,000 Fmk per farm. The earnings from logging in connection with delivery contracts amounted to 3.3 milliard Fmk, and the earnings from occasional work to 6.7 milliard Fmk. The income from stumpage together with the earnings from delivery loggings amounted to 123,000 Fmk per farm. Adding the earnings from occasional forest work, an aggregate forestry income of 150,000 Fmk per farm has been obtained, 70–75% of which accounts for stumpage price.

The occasional earnings from sources other than forestry were on average 12–13 milliard Fmk, or 45,000–50,000 Fmk per farm. The agricultural income of the farms was 60.4 milliard Fmk, or 230,000 Fmk per farm. Thus, the aggregate income of the farms was 110 milliard Fmk, or 420,000 Fmk per farm.

The financial surplus from forestry per farm for the farms included in the study in 1951–1954 was on average 21, and the income from forestry 18 times as high as in 1934–39. The income from stumpage at the end of the same period was 18, and the earnings from occasional work 27 times as high as at the beginning of the period.

The agricultural income has the greatest relative importance in Southern Finland and Eastern Bothnia. The income from stumpage, in turn, has the greatest relative significance in supporting agriculture in the inner part of Finland, while the occasional income plays its most vital role in northeast Finland.

The PDF includes a summary in English.

  • Maatalousväestön taloudellista asemaa selvittävä komitea, E-mail:
article id 4596, category Article
Valtion metsäkauppakomitea. (1948). Valtion metsien pysty- ja hankintamyynneistä : valtion metsäkauppakomitean mietintö. Silva Fennica vol. no. 63 article id 4596.
English title: On stumpage sales and sales at delivered price in state forests.
Original keywords: hakkuut; valtionmetsät; kannattavuus; puukauppa; metsätulot; komiteamietinnöt; pystykauppa; hankintakauppa
English keywords: profitability; fellings; state forests; timber sales; committee; forest income; stumpage sale; sale at delivery price
Abstract | View details | Full text in PDF | Author Info

The government of Finland appointed a committee to study which method of selling wood, sale at delivered price or stumpage sale, is more profitable method for wood sales from state forests.

According to the committee, in normal conditions, when supply and demand determine the price of timber and forest work wages are dependent on the supply and demand of labour, returns from the sale at delivered price has proved more favourable than stumpage sale. During the World War II the case was, however, the opposite. Sale at delivered price can have also other advantages. The state has by means of logging a hold in the labour market and can use loggings, for instance, to ward off unemployment. Also, loggings can be more easily used in rational silviculture. They keep the supervising staff of forest districts employed throughout the year and provide better professional training for the foresters. In addition, the number of buyers from state forests has increased. The stumpage sale may, however, be good method in certain conditions. The committee states that the State forestry officials are best able to decide on the most favourable method of selling.

The article includes an abstract in English.

  • Valtion metsäkauppakomitea, E-mail:
article id 4580, category Article
Johannes Virolainen. (1943). Karjalan kannaksen metsätaloudesta ja sen merkityksestä alueen pienviljelijöiden ansiotaloudessa. Silva Fennica vol. no. 60 article id 4580.
English title: Forestry in the Karelian isthmus and its influence on the economy of small farms.
Original keywords: metsätalous; yksityismetsät; puukauppa; maatilat; metsätulot; liiketalous; maatilametsätalous; Karjalan kannas; pientilat
English keywords: forestry; economics; private forests; agriculture; farms; timber sales; small farms; forest income; wood trade; Karelian isthmus
Abstract | View details | Full text in PDF | Author Info

The article is based on studies made in the Karelian isthmus in 1936-1938 before the World War II broke in 1939. Further studies were not possible after the war when the area was handed over to Soviet Union. Economic data of agriculture and forestry of the farms had mostly been regarded separately in the early economic studies of small farms in Finland. This survey aimed at studying influence of forestry in the economy of a small farm. 141 farms were included in a more detailed survey.

Forestry accounted for in average 38% of total income of the farms in 1937-1938. The farms had sold wood often, the amounts being often small. Good transport connections in the area facilitated the sales. Over 70% were sales at delivered price, and about half of the wood was small-sized timber. According to the results of the survey, forestry was important for the small farms in Karelian isthmus. The farmers could not have made a living without the forests. Hoveter, the farms had had to overuse the forest resources. The wood resources decreased by 18-22% in 1922-1938. They were, however, at the same level as in average in Finland in 1938.

The article includes an abstract in German.

  • Virolainen, E-mail: jv@mm.unknown (email)

Category: Article

article id 7473, category Article
Kustaa Kallio. (1957). Käenkaali-mustikkatyypin kuusikoiden kehityksestä Suomen lounaisosassa. Silva Fennica vol. 66 no. 3 article id 7473.
English title: On the development of spruce forests of the Oxalis-Myrtillus site type in the south-west of Finland.
Original keywords: kuusi; kuusikko; kasvu; hakkuuarvo; tilavuuskasvu; arvokasvu; kiertoaika; metsän puhdas tuotto
English keywords: Norway spruce; Picea abies; growth; volume growth; rotation; value growth; annual forest rent; net forest income
Abstract | View details | Full text in PDF | Author Info

In this investigation was studied 1) Volume growth and yield of timber in managed Norway spruce (Picea abies (L.) Karst.) forests under different rotations. 2) Value growth, net forest income and soil expectation value of managed forests under different rotations, and 3) The rotations of spruce forests managed on different rotation principles. The data was collected from Oxalis-Myrtillus type forests in South-West Finland.

Two developmental series of stands were constructed for the research, one of which were of better sites than the other. Sample plots were pure, even-aged spruce stands in well-managed forests. The stands had been thinned from below. The age varied from 25-30 years to the age of final cutting.

According to the study, in the artificially regenerated spruce stands the highest mean annual volume growth, 9.7 m3/ha, and also the highest net annual income of 14,50 Finnish marks/ha (calculated from average stumpages) was reached in rotation of 70 years. In the other managed spruce forests a mean annual volume growth of 6.6-8.8 m3/ha and the net annual income of 10,500-14,500 Finnish marks/ha were reached in the rotation of 70-100 years. The rotation for the maximum mean annual volume growth varied in the different series between 67-92 years. The maximum mean annual forest rent was only achieved in series B in a rotation of about 100 years, and in a naturally normal stand in a rotation of about 120 years. The intensity of thinnings and silviculture had a greater effect on value growth and on net income than on volume growth.

The PDF includes a summary in English.

  • Kallio, E-mail: kk@mm.unknown (email)
article id 7469, category Article
Antero Piha. (1957). Metsätulot ja maatilan pääoman muodostus. Silva Fennica vol. 65 no. 6 article id 7469.
English title: Forest income and capital formation of a farm.
Original keywords: maatila; metsätulot; pääoma; maatilatalous; investoinnit; hakkuutulot
English keywords: farm; forest income; farm economy; forest holding; investments
Abstract | View details | Full text in PDF | Author Info

This investigation studies the significance of forest income to the economy of a farm in Finland. It concentrates on the relationship between monetary income from forestry and the capital of the farm, especially from the viewpoint of investments made in the agriculture. The material is based on results of the accounting holdings of the National Board of Agriculture between the financial years 1925-1926 and 1936-1937.

The study shows that there is a high correlation between farm’s monetary investments and changes of deposits, and changes in the monetary income of forestry. The changes in depts seem not to be as closely related to forest income as could be expected. The most important role of forestry income in farm economy is financing the investments, i.e. operations that aim at developing and rationalizing farming and making it more profitable. In many parts of the country, the investments would have remained low without income from forestry. Income from cuttings provides usually a relatively large sum on a single occasion, which is easier to use to finance a large investment compared to a smaller regular income. The needs of agriculture may, however, lead to overcutting of the forests.

The PDF includes a summary in German.

  • Piha, E-mail: ap@mm.unknown (email)
article id 7444, category Article
Lauri Selin. (1954). Metsätaloutemme verotetut tulot vuosina 1950-53 erään laskelman valossa. Silva Fennica vol. 61 no. 32 article id 7444.
English title: Forestry income taxed in Finland in 1950-1953 in the light of a calculation.
Original keywords: metsätalous; yksityismetsät; metsäverotus; verotus; verotettavat tulot
English keywords: forestry; forest taxation; private forests; taxation; income; taxable income
Abstract | View details | Full text in PDF | Author Info

Due to the nature of forest taxation in Finland, there has been no information available on the amount of tax paid by forestry or of taxable forestry income. The main reason for this is the close connection of taxation of forestry and agriculture, which has made it difficult and expensive to separate the information of the sectors. This study determined the amount of taxable forestry mathematically based on statistics on the taxable forest areas in each tax zone on a county level.

The article concludes that the stumpage has been considerably higher than the taxable income in 1950-1953. In 1951 only 18.5% of the income received as stumpage was taxed, but in 1953 the proportion was 82.8%. In average 45% of the stumpage amount had become subject to taxation.

The Acta Forestalia Fennica issue 61 was published in honour of professor Eino Saari’s 60th birthday.

The PDF includes a summary in English.

  • Selin, E-mail: ls@mm.unknown (email)
article id 7441, category Article
N. A. Osara. (1954). Valtion metsämaiden verotus. Silva Fennica vol. 61 no. 29 article id 7441.
English title: Taxation of state woodlands.
Original keywords: metsätalous; valtion metsät; verotus; valtion tulovero; ylijäämä
English keywords: forestry; Finland; forest taxation; state forests; taxation; income; state forestry; surplus; property and income taxes
Abstract | View details | Full text in PDF | Author Info

In Finland the state has to pay local government taxes and certain connected smaller taxes, such as church and land taxes and forest management fees, on its forest property. On the other hand, the state tax on income and property is not collected, as the corresponding amount goes to the state in the form of a state forestry surplus.

It has been stated that if the state should pay similar taxes as companies do, the income of state forests would be small. The author has calculated the different taxes as if the state forestry would be a company or an individual tax-payer. As a company the income and property taxes would amount to 1,251 million marks and as a company 730 million marks using the data of 1952. In drawing up the balance sheet for state forestry, local government taxes and other similar charges have been taken into account as expenses. By comparing the surplus with the calculated state tax payable, the state forestry would give a surplus, after deduction of taxes, of 1,846 million marks as an individual and 2,367 million marks as a company. State forestry would thus have been able to pay state income and property taxes from its surplus.

The Acta Forestalia Fennica issue 61 was published in honour of professor Eino Saari’s 60th birthday.

The PDF includes a summary in Engilsh.

  • Osara, E-mail: no@mm.unknown (email)
article id 7431, category Article
Lauri Heikinheimo. (1954). Sahatavaran vientitulon jakaantumisesta vuosina 1913-1953. Silva Fennica vol. 61 no. 19 article id 7431.
English title: On the distribution of income from Finnish sawn timber exports in 1913-1953.
Original keywords: vienti; sahatavara; palkat; tuottavuus; sahatavaran hinnat
English keywords: productivity; sawn timber; prices; export; wages; income; export prices for sawn timber.
Abstract | View details | Full text in PDF | Author Info

The investigation studies the development of a logger’s daily earnings, a sawmill worker’s hourly earnings, saw timber stumpage prices and saw timber export prices, expressed in marks in Finland in 1913-1953, concentrating upon the trends of real value.

Although worker’s earnings in forestry and sawmilling have developed differently especially in the 1920s, the late 1930s and the early 1940s, their general long-time development has been very similar. On the other hand, the stumpage prices increased in real value much sharply than wages before the World War II. The real value of stumpage prices dropped because of economic regulation measures in the 1940s until regulation was abolished and the Korean War boom raised them in 1951, to fall after that. The development depends partly of the development of export prices for sawn timber.

Without changing the distribution of income from exports the real value of labour earnings, measured by export prices, may rise at most at a pace corresponding to the productivity of work. In logging there has been no actual increase in the productivity in the 20th century. As the increase in the productivity in timber transportation has probably been absorbed in increased wages and capital costs in the branch, a rise in forest labour’s real earnings and stumpage is possible only by means of a rise in the productivity of sawmilling or a change in the distribution of export income. It seems that from the end of World War I up to the middle of 1920s this increase of productivity and in export prices of sawn timber was shared only by capital and possibly mill labour. After that up to World War II stumpage prices rose so steeply that they swallowed the entire increase in productivity and reduced capital’s share of the export price. In the 40s the level of earnings followed the trend of productivity in industry, made possible by a sharp reduction in stumpage.

The Acta Forestalia Fennica issue 61 was published in honour of professor Eino Saari’s 60th birthday.
The PDF includes a summary in English.

  • Heikinheimo, E-mail: lh@mm.unknown (email)
article id 7353, category Article
M. Lappi-Seppälä. (1940). Suomen evankelisluterilaisten seurakuntien kirkollisvirkatalojen metsät ja metsätalous. Silva Fennica vol. 49 no. 6 article id 7353.
English title: Forestry and forest holdings of the residences of Evangelical Lutheran parishes in Finland.
Original keywords: Metsähallitus; metsänhoito; metsätalous; kirkollismetsät; virkatalo
English keywords: forest management; forestry; Forest Service; forest income; parish
Abstract | View details | Full text in PDF | Author Info

Residences of priests in Evangelical Lutheran parishes in Finland, and the forest holdings belonging to them, have been received in different ways. Some have been donated to the church, some belonged originally to the state, and some have been parceled out from the lands of local farmers. The forests holdings were, therefore, not considered to be property of the church. The use of the forests was limited, and they were managed by a forest management plan under supervision of Metsähallitus (Forest Service). The aim of the study was to survey the extent of forests properties of the parishes, how they have been managed, and their incomes to the parishes in 1933-1938.

The 784 residences had 217,600 hectares of forests. The forest holdings of the residences were larger than private forests in general. Also the forest resources, as well as the stocks of standing timber were larger than in private forests. The growing stock has grown further, because increment has exceeded the fellings. The fellings and income of the forestry had been increasing. At the same time, the costs of forestry were increasing. The forest holdings were divided unevenly between the parishes. About 15% of the parishes had no forest income, while the annual income of 10% of them was over 100,000 Finnish marks. In average, the forest income coverd 21.8% of all income of the parishes. Thus, the amount of forest income influenced the height of the church taxes.

The PDF includes a summary in German.

  • Lappi-Seppälä, E-mail: ml@mm.unknown (email)
article id 7244, category Article
Eino Saari. (1929). Etelä-Suomen yksityistilojen metsätalouden tuotto. Silva Fennica vol. 34 no. 31 article id 7244.
English title: Return of private forests in the Southern Finland.
Original keywords: kannattavuus; maatalous; yksityismetsätalous; maatila; metsätulot
English keywords: profitability; private forests; agriculture; farms; forest income
Abstract | View details | Full text in PDF | Author Info

The economy of the forestry in private farms in Southern Finland was studied based on the statistics compiled by the Board of Agriculture, and published in the series Tutkimuksia Suomen maatalouden kannattavaisuudesta (Investigations into the profitability of agriculture in Finland). The results present income, expenditure, assets, gross return, net return of the forests in the farms in 1924‒1926. The annual net return of the smallest farms (<10 ha forest land) was 884 Finnish marks and in the largest (>100 ha forest land) 48,335 Finnish marks. The location of the farm influences greatly the net return. For instance, the transport costs of timber from the forest is higher in the larger farms. To utilize the advantages of management of a large forest area requires knowledge about forestry. In addition, the fellings were higher in the small farms during the period. The net return is greater in the private forests than in the state forests located in the same region. Agriculture gave the farms larger net return than the forestry.

The volume 34 of Acta Forestalia Fennica is a jubileum publication of professor Aimo Kaarlo Cajander. The PDF includes a summary in English.

  • Saari, E-mail: es@mm.unknown (email)
article id 7507, category Article
Reijo Mykkänen. (1994). Aspiration-based utility functions in a planning model for timber flow management. Silva Fennica vol. 0 no. 245 article id 7507.
Keywords: bounded rationality; income trajectories; capital theory; intertemporal choice; resource economics
Abstract | View details | Full text in PDF | Author Info

The study presents a theory of utility models based on aspiration levels, as well as the application of this theory to the planning of timber flow economics. The first part of the study comprises a derivation of the utility-theoretic basis for the application of aspiration levels. Two basic models are dealt with; the additive and the multiplicative. Applied here solely for partial utility functions, aspiration and reservation levels are interpreted as defining piecewisely linear functions. The standpoint of the choices of the decision-makers is emphasized by the use of indifference curves. The second part of the study introduces a model for the management of timber flows. The model is based on the assumption that the decision-maker is willing to specify a shape of income flow which is different from that of the capital-theoretic optimum. The utility model comprises four aspiration-based compound utility functions.

The theory and the flow model are tested numerically by computations covering three forest holdings. The results show that the additive model is sensitive even to slight changes in relative importance and aspiration levels. This applies particularly to nearly linear production possibility boundaries of monetary variables. The multiplicative model, on the other hand, is stable because it generates strictly convex indifference curves. Due to a higher marginal rate of substitution, the multiplicative model implies a stronger dependence on forest management than the additive function. For income trajectory optimization, a method utilizing an income trajectory index is more efficient than one based on the use of aspiration levels per management period. Smooth trajectories can be attained by squaring the deviation of the feasible trajectories from the desired one.

  • Mykkänen, E-mail: rm@mm.unknown (email)
article id 7600, category Article
Pekka Kilkki. (1968). Income-oriented cutting budget. Silva Fennica vol. 0 no. 91 article id 7600.
Keywords: forest management; forest management planning; income; methods; forest holdings; cutting budget
Abstract | View details | Full text in PDF | Author Info

The aim of this study was to develop cutting budget methods for a forest undertaking. Cutting budget provides information on the future income from the forest undertaking, and on the development of the forest.

Two cutting budget models have been developed, by the application of simulation and linear programming. Both of the models are deterministic in nature, i.e. there is only one possible outcome once the stated input information has been given. To make the models simpler, it has been assumed that thinning and clear cutting with reforestation are the only activities that can occur in the forest. The models are directly applicable only to forests consisting of even-aged Scots pine stands at three different forest types. However, they can easily be extended to cover forests comprising several tree species and more sites.

In the light of this study, simulation seems today to be more appropriate than linear programming in the preparation of cutting budgets. However, the increasing capacity of computers may even in the near future make linear programming quite competitive, especially as if it is borne in mind that the theoretical basis of linear programming is much firmer than that of simulation. The most advisable cutting budget method might consist of a combination of simulation and linear programming. Simulation could be employed to find a rough cutting schedule, and linear programming to test and improve the solution.

The PDF includes a summary in Finnish.

  • Kilkki, E-mail: pk@mm.unknown (email)

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