Public Lands and the U.S. Economy: Balancing Conservation and Development by George M. Johnston & Peter Emerson

Author:George M. Johnston & Peter Emerson [Johnston, George M. & Emerson, Peter]
Language: eng
Format: epub
Tags: International Relations, Political Science, General
ISBN: 9781000272697
Google: UU2fDwAAQBAJ
Goodreads: 51373025
Publisher: Routledge
Published: 2019-06-26T00:00:00+00:00

Economic Aspects of Different Levels of National Forest Harvesting

Thus far, the following relationships have been found: (1) the price elasticity of demand for national forest timber is inelastic; and (2) the marginal costs of increasing the level of national forest harvesting are rising. Recently, the Reagan administration has argued that the Forest Service should increase its annual cut. Quite clearly, the empirical reality of the proposed harvest increases runs counter to the federal government's announced desire to reduce the federal deficit. An outward shift in the agency's supply function will reduce federal income because the demand for national forest timber is inelastic. Under current cost scenarios, higher harvests require higher agency expenditures. Thus, the administration's direct impact on the budgetary deficit will be even lower receipts and higher expenditures. If the administration wants to directly reduce the national forest system's small share of the federal deficit, a combination of Cost and cut reduction seems to be the plausible path.3

What then of the privatization of national forest timber lands? No doubt budget costs would fall. Furthermore, there likely would be some short term revenue gain above the administrative costs of privatization. But that does rot appear to be the ultimate goal of the privatization interests. Baden and Stroup (1975) argue that there would be significant gains in managerial efficiency and social equity accruing from privatization. But there is no empirical evidence offered to support those claims.

Consider the evidence usually presented in the case for privatization. Table 5.3 below shows the level of growing stock, harvest, and growth as well as harvest as a percentage of stock, and growth as a percentage of stock. As Hirshchleifer (1974) has argued, growth as a percentage of stock is a rate of

Table 5.3: Annual Timber Growth and Removal by Ownership, January 1, 1977

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