The Economic Impact of Individual Fires on the Whole Forest

A method is presented whereby the economic impact of a forest fire can be calculated, not just on the burned stand alone, but on the entire area under management. The main question is whether, when the burned area would have been ready for harvesting, another area will be substituted in its place. If so, then the economic impact is diffused throughout all stands younger or less desirable than the burned one, and the present value of the burned stand only may not be a fair measure of loss. The true loss would be, instead, the change in present value of the whole forest as a result of the fire. Some examples are given, and the effects of varying the rates of interest and forest growth are illustrated.