Files
Abstract
A mail survey of NIPF owners in two counties in northern Sweden
was conducted to investigate the risk preferences, perceptions of the return
and risk of timber investment relative to investment alternatives outside
forestry. Our aim was to determine to what extent the NIPF owners’
harvesting behaviour was consistent with their preferences and subjective
judgments.
A majority of the respondents were risk-neutral or risk-prone. We
found that risk preferences have significant impacts on the decision to fell;
the more a forest owner likes to take risks, the more likely it is that he/she
conducts final felling. The result also shows large variations among NIPF
owners with respect to the subjective judgements of the return and risk of
the alternative investments.
For each respondent we elicited the most preferred investment
alternative based on the stated risk preferences and the subjective
judgements of the return and risk of the alternative investments. Owners
whose preferred investment alternative is the mature forest are on average
significantly less active in harvesting than owners with other preferred
investment alternatives. The study reveals indications of the difficulties for
NIPF owners to make rational decisions when faced with uncertainties.