Search

• Importance of modelling storm impacts from a physical and an economic standpoint. • After storms, stand full destruction and clear-cut by default: not good assumptions. • The cut-or-keep decision rule significantly increases the land expectation value. • Keeping stand after a storm: often a sound economic decision. • Some variables (age, diameter) include the relevant information for decision making. After a windstorm hits a forest stand the forest owner has two possibilities: clear cut and start a new rotation or let the standing trees grow until maturity. We compute the Land Expectation Value (LEV) under the risk of windthrow and introduce an endogenous rule to account for this decision. We compare the result with the default alternative of systematic clear felling and replanting (commonly assumed in existing literature). We have calibrated our model to represent maritime pine plantations in south-western France. Results show that by following this rule, payoffs may increase by up to 90% when the economic risk (i.e. probability of having a windstorm) is high. About 75% of the time it is profitable to keep the standing trees until maturity. Although payoffs are sensitive to economic risk, the optimal rotation age does not change much with significant increases in the risk probability. [ABSTRACT FROM AUTHOR]