Abstract

http://ssrn.com/abstract=1978326
 
 

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Determinants of Forestry Investment and Extent of Forestry Expansion by Smallholders in New Zealand


Bhubaneswor Dhakal


ABIN/CSRIO

Hugh Bigsby


affiliation not provided to SSRN

Ross Cullen


Lincoln University (NZ) - Commerce Division

February 2, 2008

Review of Applied Economics, Vol. 4, No. 1, pp. 65-76, 2008

Abstract:     
While there has been a large increase in investment in plantation forestry in New Zealand by smallholders during the past decade, there are still many smallholders who have chosen not to become involved in this land use or who are using only a portion of their potentially planted land for forestry. To understand why this is the case this paper studies two issues, the differences between those who have and have not established plantation forests, and the factors that explain the proportion of land used in forestry by smallholders who have identified that who have potentially plantable land. Land used in forestry is treated as two step decision process, where first a landowner must decide whether they would consider plantation tree at all, and secondly how much land would be planted in trees. With this approach a double hurdle model was used to study planting decision. Using survey data obtained from 349 landholders in four South Island districts, the results of the study indicate that property-specific factors, such as property size and years of ownership, and ownership being part of partnership, as well as landowner characteristics such as perceptions of tax policies, being favorable forestry, off farm income level and expectations of increasing log prices were correlated with the decision whether to establish plantation forest. The factors determining extent of land use in forestry is identified as being potentially profitable in forestry actually being used, for plantation forestry include forestry tax policy, expectations of increasing log prices, regional location of a property, owner’s annual income, and area used in beef and sheep production.

Number of Pages in PDF File: 12

Keywords: Double hurdle model, small holders, planation forest, decisions, tax policy, log price, ownership

JEL Classification: Q15, Q23

Accepted Paper Series


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Date posted: January 14, 2012  

Suggested Citation

Dhakal, Bhubaneswor and Bigsby, Hugh and Cullen, Ross, Determinants of Forestry Investment and Extent of Forestry Expansion by Smallholders in New Zealand (February 2, 2008). Review of Applied Economics, Vol. 4, No. 1, pp. 65-76, 2008. Available at SSRN: http://ssrn.com/abstract=1978326

Contact Information

Bhubaneswor Dhakal (Contact Author)
ABIN/CSRIO ( email )
1 Wilf Crane Cres
Canberra, 2600
Australia
Hugh Bigsby
affiliation not provided to SSRN ( email )
Ross Cullen
Lincoln University (NZ) - Commerce Division ( email )
P.O. Box 84
Canterbury, 7640
New Zealand
Feedback to SSRN


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