Cumulative Effects of Constraints on Forest Management

Regulations and other constraints that apply to forest management have increased over time as have attendant costs, which are measured here in terms of reduced yield. An example application shows that the marginal impact of an additional constraint depends on the constraints that precede it, initial conditions of the forest, and length of the planning horizon. This example concurs with other studies by showing that constraints can significantly (by more than 20%) reduce yields. However, the exact loss in potential yield depends on the specific situation. The impact of a new constraint is reduced if numerous constraints precede it, because an ever-increasing number of constraints eventually drives yields to zero. These results imply that the cumulative effect of ever-increasing constraints could eventually render forest management uneconomic.