timberland; and the Williamson Act, legislation offer- 
ing preferential property tax assessment to 
landowners who place their holdings under a Tim- 
berland Protection Zone. The study reveals forestry 
investment in California to be a function of income, 
age, and absentee ownership, with the cost-share 
program and property tax incentives proving social- 
ly selective. Landowners with high probabilities of 
investment tended to use the California program to 
intensify investments, a factor the authors attributed 
more to the management content of the program 
than to its subsidy, while landowners with low prob- 
abilities of investment tended to respond to the 
property tax incentives to initiate forestry invest- 
ments. The study concludes that a fundamental 
need is "to diversify policy instruments so that own- 
ers and governments gain choices and more favor- 
able contexts in which to make them." 
Royer 
Royer (1986a unpubl.) used southwide survey 
data from personal interviews with landowners who 
had harvested timber between 1971 and 1981 (Fec- 
so and others 1981) and an investment model spec- 
ified by McMahon (1964) to demonstrate a positive, 
albeit modest, effect of pulpwood (but not 
sawtimber) prices on the likelihood of reforestation 
after harvest, a strong negative effect of reforesta- 
tion costs, and strong positive effects of income, 
technical assistance, and cost-sharing. 
Using a similar specification with Southwide 
data from a 1986 survey of landowners who sold 
timber in 1983, Royer (1986b unpubl.) found similar, 
modestly positive effects for pulpwood prices, but 
not sawtimber prices, a negative effect of costs, and 
strong positive effects of income, technical assis- 
tance, cost-sharing, and reforestation tax incen- 
tives. (In the pilot study for the 1986 survey, Royer 
(1985) failed to demonstrate a marginal effect of the 
tax incentives among landowners from seven North 
Carolina counties.) 
Greber and Lawrence 
Greber and Lawrence (1986) explored 
landowner investment behavior using data supplied 
by consultants for several Virginia counties and a 
two-staged investment model. The first stage mod- 
els the decision of whether to reforest; the second 
stage models the decision of how much to invest 
84 
once a reforestation decision is made. Their results 
show that the decision of whether to invest is a 
function of owner and ownership characteristics, 
namely age, farm versus nonfarm occupation, and 
the harvest of pine rather than hardwood. Financial 
variables such as price, harvest revenues, and 
costs are not significant for this decision. In con- 
trast, the amount invested in reforestation is a func- 
tion of prices, revenues, and cost-sharing assis- 
tance. The implication, according to Greber and 
Lawrence, is that". . tax incentives and cost-sharing 
may serve to encourage more intensive reforesta- 
tion practices by landowners inclined towards plan- 
tation forestry, but may not encourage more 
landowners to adopt plantation forestry." 
Collective Results 
The upshot of these recent studies of invest- 
ment behavior is new information on the effects of 
certain key structural parameters of landowner in- 
vestment models. But while some degree of conver- 
gence emerges, enough variation in the theoretical 
underpinnings of landowner investment behavior, 
model specification, and parameter estimation re- 
mains to suggest that more work is needed. At this 
juncture, however, the following conclusions seem 
to hold: 
@ Forestry investment decisions are only mod- 
estly affected by stumpage price signals and 
the prospect of financial returns. 
@ Landowners considering forestry investments 
are sensitive to costs and therefore are likely to 
respond to low-cost reforestation alternatives or 
public financial incentives that reduce their 
costs. 
@ Landowners respond to public financial incen- 
tives, if not by opting to reforest then by intensi- 
fying their investment. 
e Despite public financial assistance and high 
economic opportunities, some landowners are 
constrained from investing by limited financial 
resources. 
@ Technical assistance from _ professional 
foresters, public or private, increases the likeli- 
hood of forestry investment. 
