Influence of Growth Prediction Errors on the Expected Losses from Forest Decisions

In forest planning, forest inventory information is used for predicting future development of forests under different treatments. Model predictions always include some errors, which can lead to sub-optimal decisions and economic loss. The influence of growth prediction errors on the reliability of projected forest variables and on the treatment propositions have previously been examined in a few studies, but economic losses due to growth prediction errors is an almost unexplored subject. The aim of this study was to examine how the growth prediction errors affected the expected losses caused by incorrect harvest decisions, when the inventory interval increased. The growth models applied in the analysis were stand-level growth models for basal area and dominant height. The focus was entirely on the effects of growth prediction errors, other sources of uncertainty being ignored. The results show that inoptimality losses increased with the inventory interval. Average relative inoptimality loss was 3.3% when the inventory interval was 5 years and 11.6% when it was 60 years. Average absolute inoptimality loss was 230 euro ha(-1) when the inventory interval was 5 years and 860 euro ha(-1) when it was 60 years. The average inoptimality losses varied between development classes, site classes and main tree species.