Multi-stand forest management under a climatic risk: do time and risk preferences matter?

We propose a stochastic dynamic framework to model the management of a multi-stand forest under climate risk(strong wind occurrence). The preferences of the forest-owner are specified by a non-expected utility in order to separately analyse intertemporal substitution and risk aversion effects. A numerical method is developed to characterize the optimal forest management policies and the optimal consumption-saving strategy. The stochastic dynamic programming framework is applied to a non-industrial private forest-owner located in the North-East of France. We show that the optimal decisions both depend upon risk and time preference