Research trends: Adding a profit function to forest economics

Abstract The Faustmann formulation (or FF) has been widely adopted in determining the optimal rotation and the concomitant net present worth of timber production. Nonetheless, the FF is not a profit function, and there has not established such a function, along with its dual cost and production functions, in virtually all the forest economics texts. Without such a set of functions, however, a large part of the production economics that is broadly used in other sectors of the economy remains absent in forestry. With them, we can more effectively approach and analyze timber supply, forest investment, ecosystem service provision, and other issues at the appropriate, aggregate level(s). Adding a profit function to forest economics will thus be a major step forward in advancing the disciplinary instruction and research beyond a timber stand.