@techreport{Alvarez2004Taxation,
abstract = {The paper uses both the single rotation and ongoing rotation framework to study the impact of
yield tax, lump-sum tax, cash flow tax and tax on interest rate earnings on the privately
optimal rotation period when forest value growth is stochastic and forest owners are either
risk neutral or risk averse. In the case of risk-neutral forest owner higher yield tax raises the
optimal harvesting threshold and thereby prolongs the expected rotation period. The same
qualitative result holds for lump-sum tax and for the tax on interest rate earnings, while the
cash flow tax is neutral. Under risk aversion the optimal harvesting threshold is lower and the
expected rotation period shorter than under risk neutrality both in the single and ongoing
rotation cases. Comparative statics of taxes are similar as under risk neutrality with the
exception of cash flow tax, which may not be neutral anymore. Numerical results indicate that
the optimal harvesting threshold both as a function of the yield tax and the forest value
volatility increases more rapidly under risk neutrality than under risk aversion.},
author = {Luis H. R. Alvarez and Erkki Koskela},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {C44; D80; Q23; 330; optimal rotation; taxation; stochastic forest value; risk aversion; Forst\"{o}konomie; Forststeuer; Steuerwirkung; Abholzung; Theorie},
language = {eng},
number = {1211},
title = {Taxation and rotation age under stochastic forest stand value},
type = {CESifo working papers},
url = {http://hdl.handle.net/10419/18850},
year = {2004}
}
