A cost function estimating the loss due to extended rotation age

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Abstract
A method for estimating the economic loss in timber production resulting from extending the rotation age was studied. Basically, optimal rotation age depends on the stated objectives. If the objective comprises only timber production, the rotation age is derived from maximizing the net present value (PV) of timber production. If, on the other hand, the objective function includes, for example, the maintenance of biodiversity and scenic values, the optimal rotation age is likely to be extended. In the present study, PVs from successively extended rotation ages were estimated for a sample of economically mature stands. The PVs were based on no thinning allowed (case A), and thinning allowed in the first 5‐yr period (case B). By using regression analysis, functions were estimated that predict the inoptimality loss from extending the rotation age for both cases. Stand data collected by subjective (ocular) inventory methods were the regressors. Only the problem of economic loss in timber production from extending the rotation age, and not the utility gain, was analysed.