Extending the boundaries of forest economics

The existing forest economic models, rooted in sustained yield timber management systems and neo-classical economic framework, are subject to many limitations. Social, economic, and ecological features of sustainable forest management (SFM) are different than that of sustained yield timber management. Hence, the economics of SFM will be based on different economic principles. The two main requirements of the economics of SFM are the economics of multiple equilibria, and a consumer choice theory that incorporates heterogeneity of agents, context specific and dynamics of preferences, distinction between needs and wants, and the subordination of needs. These requirements will need the extension of the boundaries of forest economics. Five basic principles—principles of ‘both–and’, ‘existence’, ‘relativity’, ‘uncertainty’, and ‘complementarity’ will work as a foundation, and the economic principles, developed by evolutionary, institutional, ecological economists and economists from other new streams of economics, will be the useful tools to extend these boundaries.