The Optimal Rotation 1. Private benefits consist of the revenue, less harvest costs, derived from the harvest. This amount is called the stumpage value of the forest. Versus Marginal Costs 1. Marginal benefits consist of the increase in stumpage value that occurs if we let the forest grow for another year.
Market price is assumed to remain constant over time.
Marginal costs consist of the sum of the additional interest foregone on the revenues from harvest and the rent foregone on the land. As in any other situation, the optimal rotation occurs at the point at which marginal revenues equal marginal costs. A decrease in the market price of timber. The Effect of Including Non-harvest Benefits 1. Non-harvest benefits include watershed and wildlife protection, and recreation.