Spatial Interactions in Multiple-Use Forestry and Substitution and Wealth Effects for the Single Stand

Forestry models often ignore spatial relationships between forest stands. This paper isolates the effects of stand interactions in muitiple-use forestry through a straightforward extension of the single-stand model. Effects of stand interactions decompose into wealth and substitution effects and may cause time-varying patterns of resource use for a forest stand. Simulations illustrate that a stand's role, even in steady-state, may alternate an emphases on timber with an emphasis on nontimber. Optimal management plans differ substantially. depending on whether the manager values nonmarket goods from neighboring stands. The model offers insights for improving heurtstlc forest-level optimization models in current usage.