The Economics of Tropical Forest Land Use Options

Tropical deforestation is generally characterized as conversion of forest land to alternative uses, notably agriculture. This would suggest the need for rational decision making concerning the optimal allocation of tropical forest land between competing uses. The following paper explores this problem by devising rules for determining optimal land use allocation between timber and agriculture at the stand and forest levels. A complementary intertemporal model for optimal allocation of forest land to agricultural conversion at the forest level is also developed and used to derive a demand relationship for agricultural conversion, which is then approximated through empirical estimation.