RETHINKING THE ECONOMIC-ANALYSIS OF FORESTS - THEORY AND PRACTICE

The principles for the economic analysis of forests presented by Godoy are reviewed here and are found to be flawed. A more satisfactory formulation of the neoclassical economic approach to the analysis of forest management options is presented. The ethical and distributional implications of this approach are criticised. Some theoretical and empirical problems faced by the neoclassical valuation methodology are also outlined. This paper argues for the adoption of a participatory land use planning (which may eventually employ the neoclassical valuation approach in a constrained fashion) to the distribution and allocation of forest resources.