Requests, credit rationing and in situ values in the Faustmann-Pressler-Ohlin forestry model.

The problem of determining the optimal time to stop the "pure aging process " has a 150-year history in forestry. The success of the rotation model lie s in the fact that it is taken to be theoretically sound, empirically testa ble and has clear practical relevance. Nonetheless, empirical findings show that timber supply depends on variables missing from the original formulat ion. Previous research has addressed the problem by abandoning the pure agi ng description of forests. This study demonstrates that the optimal aging p rocess becomes forest-owner specific under imperfect land and capital marke ts and if the owner has in situ preferences.