Duality and Faustmann: Implications for the evaluation of landowner behavior

This paper examines the behavioral consequences when landowners seek to min imize costs rather than maximize profits. We derive a cost function that is dual to the net present value function in the Faustmann Model. This cost f unction provides a theoretical foundation for studies that estimate forest production costs. We use comparative statics methodology to derive qualitat ive results for changes in selected policies and exogenous parameters. We f ind that the qualitative impacts under cost minimization are usually unambi guous. Qualitative impacts under profit maximization are usually ambiguous. This implies that behavioral impacts are usually easier to assess a priori , when landowners minimize costs rather than maximize profits.