OPPORTUNITY COSTS OF REGIONAL INCOME-REDISTRIBUTION - EVIDENCE FROM REFORESTATION INVESTMENTS IN BRITISH-COLUMBIA

More than half a million hectares of productive forest land in British Columbia have gone out of production because of inadequate reforestation following timber harvesting or destruction of the forest by insects or fire. Investments in reforestation of this backlog, not sufficiently restocked forest land are an important instrument of regional development in British Columbia. In this paper, economic efficiency losses associated with various allocations of reforestation funds among three regions of the province are examined. Income distributional weights are imputed for these regions based upon the allocation of reforestation monies. The results indicate that economic inefficiencies may arise from overinvestment in reforestation and from ignoring economic criteria in the prioritization of sites for treatment. However, there is evidence that the opportunity costs associated with regional equity concerns are not large.