Optimal timber harvesting for wood production and wildlife habitat.
If the montane ash [dominated by Eucalyptus regnans or E. delegatensis] forest of the Central Highlands region in Victoria in Australia were logged to maximize the present value of net returns from timber productions alone, stochastic dynamic programming results show that the optimum rotation would be about 50 years. Rotations of 50 years destroy habitat of Leadbeater's Possum [Gymnobelideus leadbeateri], an arboreal marsupial threatened with extinction. Trees need to be about 200-yr-old to form the hollows required by the possum for nesting. The dynamic programming model is extended to evaluate alternative cutting strategies, accounting for a social return from preservation of the possum based on the results of a contingent valuation study. Wildfire and possum survival are treated as stochastic events.