Estimating the economic net returns of Oregon & Washington forests with regard to climate change

Little work has been conducted regarding the net returns of forest lands. The Ricardian model is ripe with potential to estimate the effects of climate on net returns to forestry.\ud Multiple linear regression allows each climate variable to measure its effect of net returns with the assumption of all other factors being fixed. Independent variables of average temperature (°C), average temperature squared (°C²), average precipitation (mm), average precipitation squared (mm2), maximum August temperature (°C), and minimum December temperature (°C) were scaled by year using dummy variables to output the dependent variable of real net returns (USD 2010) per county of tree species.\ud This OLS linear regression showed annual precipitation, marginal precipitation, and maximum temperature experienced by forests to affect the net returns they produced. Increased precipitation is expected to increase net returns to forests while higher maximum temperatures will negatively impact net returns in Douglas Fir regions and positively affect pine regions. Precipitation is linearly related to forest net returns, while temperature is not linearly related. With this finding, various areas of Oregon and Washington that are expected to experience heavier precipitation due to climate change should expect more net returns from their forestlands