Mixed species plantations in Southern Chile and the risk of timber price fluctuation

Patrick Hildebrandt, Philipp Kirchlechner, Andreas Hahn, Thomas Knoke, Rodrigo Mujica H.

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24 Scopus citations


Financial assessment in forestry is characterized by considerable impacts of risk factors due to large time horizons. Accounting for the risk of timber price fluctuation mixtures of Rauli (Nothofagus alpina, P. et E., OERST.) and Douglas fir (Pseudotsuga menziesii, Mirb.) have been evaluated by different approaches. The data were taken from plantations in Southern Chile between 39°10′ and 39°50′ south latitude. Increments have been modelled in order to calculate possible financial returns and changed volume growth has been taken into consideration for mixtures of large blocks and single-tree mixtures of both species. The optimum proportions of both species varied depending on the different perspectives of the financial assessment: first, the effects of diversification shown by classical portfolio approach were low; second, the integration of moderate risk aversion of the decision maker resulted in predominance of stands with high proportions of Douglas fir, but optimum proportions of Rauli increased with higher degrees of risk aversion. The maximization of the expected surplus in relation to the fluctuation of net present values (NPVs) (Sharpe ratio) resulted in even higher optimum proportions of Rauli. However, mixed stands proved more advantageous in contrast to the financial assessment without consideration of the risk factor timber price fluctuation (maximization of NPV). Finally, the integration of further risk factors can have impacts on the results as well as the integration of further effects of single-tree mixtures. Both lacks of information should be investigated for more extensive assessments in the future.

Original languageEnglish
Pages (from-to)935-946
Number of pages12
JournalEuropean Journal of Forest Research
Issue number5
StatePublished - 2010


  • Diversification
  • Mixed species plantations
  • Portfolio
  • Risk integration
  • Sharpe ratio
  • Single-tree mixtures


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