ment decision) to future supplies of softwood in the 
South. Nonetheless, a brief summary of the findings 
of harvest decision models is instructive, if only for 
purposes of comparison with investment models. 
Models of Harvesting Behavior 
Models of harvesting behavior are found in the 
works of Binkley (1981), Max (1983), Wallace and 
Silver (1983), Boyd (1984), Provencher (1985), Hy- 
berg (1986) and Holmes (1986). Each of these re- 
searchers uses a variation of utility theory to charac- 
terize forest landowners as consumers (utility 
maximizers) rather than producers (profit maximiz- 
ers). The utility-governed landowner theoretically 
contrasts timber and nontimber opportunities when 
deciding whether to harvest and responds in a ratio- 
nal way to the utility (returns) he or she perceives 
from these opportunities. The empirical estimations 
of harvest choice models show that landowners do 
indeed act as utility maximizers, choosing to harvest 
timber when or where markets (stumpage prices) 
are favorable, but only if returns from harvesting 
timber exceed those stemming from nontimber val- 
ues. Several of the harvest models further explore 
subgroups of landowners, notably farm and non- 
farm owners, finding these groups to vary in their 
sensitivities to timber and nontimber opportunities. 
(The findings show generally that farmers are more 
sensitive to stumpage prices and therefore are 
more producer than utility oriented.) Other re- 
searchers have noted that timber and nontimber 
values need not conflict and may be satisfied simul- 
taneously. The upshot of harvest models has been 
an emerging consensus that stumpage prices work 
well as short-term determinants of timber supply, 
although two markets--those for timber and nontim- 
ber opportunities--loom important. 
Some of the harvest models also examine the 
effect of public financial incentives, notably cost- 
sharing. Boyd, for example, suggests awareness of 
cost-sharing should affect the harvest decision if 
landowners are intent upon achieving maximum fin- 
ancial returns from their timberlands. His finding of 
an insignificant effect is consistent with the notion 
that utility, not profit, governs harvesting behavior. 
Hyberg finds a similar modest effect of cost-sharing 
on harvesting, as do Wallace and Silver. Max exam- 
ines the effects of yield and property taxes on timber 
sale strategies, finding no effect from yield taxes but 
a positive effect from property taxes. 
Models of Investment Behavior 
The models of investment behavior offer more 
specific theories and more stringent tests of the 
effects of public financial incentive programs. 
Through these models we have the opportunity to 
gauge the impacts of cost-sharing and reforestation 
tax credits. Models of investment behavior are 
found in the work of Boyd (1984), de Steiguer 
(1985), Brooks (1985), Romm (1985), Royer (1986a 
and b unpubl.), Hyberg (1986), and Greber and 
Lawrence (1986). As a group, these studies are 
much less uniform than the harvest models in their 
adoption of a theory to explain landowner behavior. 
Some extend utility theory to the investment deci- 
sion; the others are derived from investment theory 
or microeconomic theory. In each case the effects of 
market, policy, owner, and ownership variables are 
investigated, but the model specifications differ, as 
do the expected signs and significance of key vari- 
ables. A general summary of the sign and signifi- 
cance of key variables from selected investment 
models is presented in table 7. The discussion be- 
low examines these studies in more detail. 
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