Customer Segments Among Family Forest Owners: Combining Ownership Objectives and Decision-Making Styles

Empirical forest owner classifications typically distinguish groups based on owners’ behaviour or motivations. Typologies are used to inform forest and environmental policies and market-based service provision. However, single typologies may be weak in discerning owner groups that would bring new insights for policymakers or service providers. The present study aims to put together two previously documented owner classification frameworks to form and analyse customer segments for decision-support services. The first grouping is based on owners’ objectives for forest ownership, while the second grouping focuses on owners’ decision-making styles. These two typologies deal with subjects of interest and motivations for communication, respectively. The study uses a subsample of the Finnish Forest Owner 2010 survey data, collected in 2009 (n = 2,106). Via cross-tabulation of the two groupings, the four largest and potentially most interesting combined owner groups are discerned: multiobjective learners (13 %), multiobjective thinkers (9 %), learning recreationists (8 %) and learning investors (7 %), while the other 16 combined groups each account for less than 6 % of owners. The result thus reveals the need for learning-oriented services for three differing principal subjects of interest as well as multiobjective services for deliberate thinkers, i.e. comparative information about forest management alternatives. The message for policymakers and service providers is that the majority of forest owners may be served with educative interactive services. Learning-oriented indifferent owners need special services to recognize their latent goals. Delegators need ready-made services for outsourced decision making and self-reliant owners need information packages of varying contents. Combinations of groups prove feasible for producing policy advice.     

Typology of non-industrial private forest owners in Tasmania

The heterogeneous nature of non-industrial private forest (NIPF) owners and the challenge this heterogeneity presents for effective policy and program design and delivery is widely recognised. Understanding the socio-economic and motivational differences between various types of landowners will better equip policymakers and forest extension professionals to design policies and programs that efficiently promote private sector timber production and forest conservation outcomes. The purpose of this study was to develop a survey-based empirical typology of Tasmanian NIPF owners based on their stated objectives of forest ownership and to relate owner type to a range of observable property and owner characteristics as well as to timber harvesting and forest management behaviour. Using principal component analysis (PCA) followed by means cluster analysis, four distinct groups are identified: income and investment owners, non-timber output owners, agriculturalists, and multi-objective owners. Members of these groups are found to differ significantly in terms of their personal and property characteristics, as well as their timber harvesting and management behaviour. For example, members of the non-timber output owners, who are motivated solely by objectives related to the production and protection of the non-timber outputs of forests, have similar proportions of timber on their property, but are less likely to have harvested timber from their property, than all other groups.     

A typology of small-scale private forest owners in Sweden

Abstract

Planning instruments have to be consistent with the underlying values of the forest owners to have an influence on their management activities. The aims of the present study were to identify different types of Swedish forest owners, to quantify their objectives and to validate a previous, qualitative study of the objectives of the small-scale forest owners. A survey was conducted and forest owners were classified by means of cluster analysis into five types: the “economist”, the “conservationist”, the “traditionalist”, the “multiobjective owner” and finally the “passive owner”. Significant factors characterizing these owners are presented and discussed. The results showed that clear subgroups of forest owners can be differentiated by their objectives and confirm recent studies suggesting that a sole emphasis on economic benefits is not desirable from the forest owners’ point of view. The findings should give a better understanding of the behaviour of the small-scale forest owners and provide a basis for further research, counselling and development of forest policy.     

The formation of small-scale forestry in countries with economies in transition: Observations from Lithuania

Lithuania has been undergoing a transition from one political culture (based on a centrally planned economy and a one-party system) to a radically different political culture (market economy and a democratic political system). After the declaration of independence in Lithuania, some new phenomena emerged in forestry: the privatisation of forest industry, the formation of a free timber market; increasing timber export levels; and new modes of ownership (private forests) and enterprise (private business logging companies). Private forest owners control approximately 680,000 ha of forest, 33% of the total forest area, projected to increase to 40–45% in the future. Small-scale private forestry is developing in Lithuania but there is a lack of information about the objectives and problems of private forest owners. This paper presents the main results of a survey carried out in 2004 by the Lithuanian Forest Research Institute. The most important forest ownership objectives are firewood production for home consumption, income generation from wood and non-wood product sales, and protection of nature and biodiversity. The main problems for private forest owners are that the forest properties are too small to achieve efficiency, owners lack money for silviculture activities and there is a heavy bureaucratic system for forest-related activity documentation. A cluster analysis of respondents’ ratings of importance for various forest management objectives reveals four groups of private forest owners. These groups are named according to their dominant management objective, as multi-objective owners, businessmen, consumers and ecologists.     

Loss function analysis of private forest owners’ timber price change expectations

Loss function analysis was introduced to timber market price analysis. Methods found in Bayesian statistical decision analysis were applied to expectations of market price changes. These were obtained from a forest owner survey conducted in Finland in 2009. Forecast errors of heterogeneous price expectations of the individual private forest owners were derived with observed price changes in six different timber price regions. The forecast errors were complemented with random number simulations to control for unobserved response heterogeneity. The properties and estimation of generalized loss functions – LIN-EX and flexible loss functions – allowing for asymmetry in individual forecast errors were introduced into the analysis. Estimation results for different price regions implied that forest owners’ perceived costs related to positive forecast errors of negative price changes that took place in 2009 were larger than those related to negative errors. This under-prediction vs. over-prediction asymmetry was large in some price regions. The forest owners exhibited an aversion to losses reflected in price expectations errors in the year 2009. The observed loss aversion means that forest owners were cautious in their selling decisions during periods of declining market prices. This has a negative impact on the recovery of slack timber markets.     

Perceived risk sources and strategies to cope with risk among forest owners with and without off-property work in eastern Norway

Abstract

This paper presents empirical insight into part-time and full-time property owners’ perceptions of risk and risk management strategies. In addition, the relationships between forest owners with varying degree of off-property work and property and forest owner characteristics, risk perceptions, risk management strategies and harvesting behaviour are examined. The data originate from a questionnaire responded to by forest owners in eastern Norway which were merged with 9 years of logging data. Timber price variability and institutional risks were perceived as primary sources of risk. Use of advisers from the forest owners’ association, buying personal insurance and off-property work were perceived as the most important ways to handle risk. The results show that off-property work affects to a lesser degree what forest owners perceived as important risk sources, but that risk perceptions affect to a stronger degree the ways in which risk was dealt with. The chosen risk management strategies influenced the forest owner's harvesting behaviour to some extent, but more research on the issue is needed to clarify the relationship. There was a positive relationship between owners with off-property activities and their performance as timber suppliers. Several measures, such as improved rural education, revision of some of the arrangements that regulate property mergers and support measures for increased on-property diversification may increase annual timber harvesting and reduce variability in harvesting level.     

A Survey of Forestry Extension Clientele in South Carolina,USA

The U.S. South contains nearly one-third of the nation’s forests and 40% of its productive timberland. This makes the southern U.S. an important part of the wood supply chain. In South Carolina, family forests cover 55% of the 13 million acres of forestland, and contribute significantly to the annual timber harvest volume. However, not all family forest owners are engaged in forest management activities. To better understand the needs and behaviors of family forest owners that are actively engaged in forest management an online survey was developed and sent to family forest owners that actively seek the help of extension agents. Results of a latent-class analysis of survey responses showed that there are three distinct groups of family forest owners that engage with extension agents: hands-on timber managers, hands-off timber managers, and multiple-use land managers. These groups differ in their utilization of help from a consulting forester and their ways of selecting timber harvesting contractors for forest management activities. Eighty-eight percent of respondents reported that their major goal of a thinning was to maximize future revenues. When asked about the expected outcome of a cleat-cut, 69% expected all trees to be removed, whereas the rest expected outcomes similar to selection, seed-tree, or commercial clear-cuts. Overall, this survey provides initial information to better focus outreach and extension efforts, but also highlights how family forest owners engage in their timber harvest.     

Factors influencing Norwegian small-scale private forest owners’ ability to meet the political goals

Abstract

Norwegian forest policy has high-level, complex objectives for the products and benefits from the forest, including increased contribution to the climate, preservation of biodiversity, and creation of economic values. In Norway, it is first and foremost small-scale private forest owners who have to deliver on these expanded goals. The article reveals owners’ lack of forestry competence, and elaborates on the role of forestry employees (advisers) in owners’ decision-making processes, be it forestry-competent owners or not. There is, however, a decreased number of advisers in the private and public forest services, implying that forest owners are atomised in the meaning of being alone. This type of individualization and an increasing lack of forestry competence among forest owners are a contradiction. The mismatch is serious for the government and the forestry business because it probably hampers the fulfilment of the political objectives. The article presents six options for meeting the obstacles to goal fulfilment. The article is based on two research projects from the counties of Trøndelag and Hedmark. Data were collected between 2002 and 2007 and include survey, focus group interviews, in-depth interviews, fieldwork and document analysis.     

Information Needs of Non-industrial Private Forest Owners After Logging Operations in Finland: A Case Study

In this study, the information needs of non-industrial private forest owners in Finland, after logging operations, were investigated. The study was carried out as an online survey in 2017. The survey was targeted at non-industrial private forest owners who had sold their timber during the previous 10 years (2008–2017) and whose email addresses were in the customer relationship management system of a large wood procurement company in Finland. A response link for the survey was successfully sent to 31,988 forest owners, of whom 3323 replied (response rate: 10.4%). The final study data included 3284 non-industrial private forest owners. The results of the study, which need to be interpreted cautiously due to the low response rate, showed that the forest owners want better-quality reporting after logging operations. Furthermore, the results suggested that gender, age, education, occupational status, place of living, size of, and access to, forest property, and length of, and objectives for, forest ownership have a significant effect on their information needs. Younger, highly-educated, female, urban-living and multi-objective forest owners with larger forest holdings and short forest ownership tenures desired more information. Particularly, the respondents conveyed that they would like more and better information about thinning harvesting result. The results also indicated that when different groups of forest owners call for certain information, there is a need for producing different types of reports after logging operations for different forest owner segments.

     

Willingness of Private Forest Owners to Supply Woody Biomass in Croatia

Renewable energy sources have received significant attention in European countries as a result of increasing dependence on energy imports and concerns over high prices of fuels and climate change. Although private forests in Croatia account for less than one quarter of all forests, they may play an important role in woody biomass energy production, due to their underutilized exploitation. The objective of this paper is to identify the willingness of private forest owners to supply woody biomass and to understand how this willingness is affected by certain owner, management and forest property characteristics. A survey conducted in Croatia in 2012 of a random sample of 350 private forest owners shows that almost half of them were willing to supply woody biomass. A random utility model was used to determine the factors influencing private forest owners’ willingness to supply woody biomass. The results showed that willingness to supply woody biomass was influenced by property size, management objectives (production of fuel wood for personal needs and using the forest for outdoor recreation), cooperation with other forest owners and owner age. In order to enhance woody biomass mobilization from private forests it is important to identify the owners who are willing to supply it and to provide them with financial and administrative support using a mix of developed forest policy instruments.     

Impact of Changes in the Sociological Characteristics of Small-Scale Forest Owners on Timber Harvesting Behavior in Quebec,Canada

Owing to the economic, social and environmental impacts associated with timber harvesting by small-scale forest owners, a number of studies have characterized their profiles, motivations and activities at a given time. However, little research has focused on how timber production has been affected by changes in the prevalence of types of forest owners over time. A 2012 telephone survey of Quebec (Canada) small-scale forest owners reveals relationships between level of harvesting and socio-demographic factors, and an evolution of these factors by examining the results of surveys conducted in 1973 and 1985. Within the same population, property size, distance between owners’ forest and homes, possession of a forest management plan, gender, education level, the length of ownership are correlated with how likely respondents were to harvest timber on their forest. Furthermore, comparison with results from previous surveys of the same population show an increase in the prevalence of characteristics associated with owners who place less importance on timber harvesting in their management decisions. Overall, since the initial survey of forest owners conducted in 1973, the size of forest holdings in Quebec has decreased, respondents’ education level has improved and the proportion of forests owned by women have increased. However, these changes are occurring at a relatively slow rate, giving government authorities time to implement policies to encourage harvesting among the new generation of forest owners.     

Forest Landscape Development Scenarios (FoLDS)–A framework for integrating forest models,owners' behaviour and socio-economic developments

The FoLDS framework presented in this paper is set up to develop scenarios for forested landscapes with a transparent connection between the broad-scale developments in socio-economic factors and the ecosystem services provided. The forests that provide these ecosystem services are managed by a multitude of forest owners. Different forest owners have their own objectives and will thus adjust their forest management differently to socio-economic developments. The FoLDS framework breaks down the connection from socio-economic developments to the landscape level in three steps. In the first step, a structure is provided for deciding on scenarios combining the socio-economic factors that have most influence on forest owners. In the second step, the scenarios are translated to the distribution of forest management approaches in the landscape by invoking a behavioural matrix of forest owner types and forest management decisions. The third step involves the implementation of these forest management approaches in a forest modelling tool that is tailored to the specific landscape at hand. The results of these calculations are then translated to a set of indicators for the ecosystem services of interest. A survey among researchers experienced with the FoLDS framework indicates that there is an added value in systematically including both qualitative and quantitative scenario methods for forested landscapes.     

Clustering-based typology and analysis of private small-scale forest owners in Slovenia

Small-scale private forest owners (SPFO) have been recognized as a relatively heterogeneous social group; therefore typology and classification have become key to describe their characteristics and differences. Most of Slovenian forest is owned by SPFOs. To understand why these forest estates are relatively poorly managed, the owners' values and objectives were analysed. We conducted a questionnaire-based survey (n=387) and based our typology on three values and four management variables. The typology was constructed automatically, using the k-medoids clustering algorithm. Clustering resulted in two clusters, which were our basis for two types of owners: “engaged” and “detached”. We analysed these two types through socio-economic and broader geo-spatial perspectives. We found that multi-objective orientation and high valuation of production function are positively related to active forest management and to the likelihood that the forest will be managed in the future. Conversely, higher value to environmental and social function corresponds to lower management levels. Spatial patterns of owners residencies and forest estates influence managing decisions. Results confirm the importance of spatial factors and owner values and objectives for understanding forest management.     

The Values and Objectives of Private Forest Owners and Their Influence on Forestry Behaviour: The Implications for Entrepreneurship

There are many factors that determine what forestry activities forest owners carry out in their forest properties and that influence whether forest owners engage in entrepreneurial activity. This paper explores whether the values and objectives of forest owners influence their forestry behaviour and their engagement in entrepreneurial activity. This is done through a review of the literature on private forest owners’ typologies based on owners’ objectives. The review reveals that typologies typically divide forest owners into two main groups. The primary objective of the first group of owners is production (of wood and non-wood goods and services) usually, although not exclusively, so as to generate economic activity. The primary objective of the second group is consumption (of wood and non-wood goods and services). There is a tacit assumption in the studies reviewed that goals and objectives do influence forestry behaviour but few studies have actually assessed whether this is the case. The general finding is that forest owners whose objectives are timber production and who are business-oriented are more likely to manage and harvest their stands. No research focusing on the link between owners’ objective and wider entrepreneurial activity in forests was found.     

Motives and Incentives for Joining Forest Owner Associations in Estonia

The development of private ownership is an important outcome of structural changes for the whole economy as well as for the forestry sector in Estonia. Cooperation between forest owners has been seen as one possibility for increasing the provision of various forest-related benefits and goods. Yet the extent of cooperation between forest owners is still not at a sufficient level, but the reasons have not been extensively studied. The authors’ aim was to find out the key determinants for forest owners to join a forest owner association and to explore how cooperation between owners could be increased. Survey data were used to divide the respondents into two groups according to whether they were members of forest owners associations or not. It was found that one key aspect is the size of the forest property—association members usually manage larger forest areas than non-members. In addition, the members tend to be more active and consistent in forest management activities than non-members. Also there is potential towards cooperation within non-members as their plans for the future are much more targeted. Although there are limits to voluntary cooperation, a huge potential for Estonian private forest owners could be realised by diversifying forest owner association activities and services to meet the different expectations of forest owners.     

Landowner Willingness to Engage in Long-Term Timber Leases in West Virginia,USA

As global competition increases for wood-based products, the need for more efficient supply chains becomes increasingly important. In the forest products sector, these supply chains involve individuals and firms ranging from private forestland owners with standing timber to factories producing final finished products. Long-term timber leases are one mechanism that can be used to develop access to timber supplies for companies unable or unwilling to purchase land outright for growing timber. To investigate private forest owner opinions and attitudes regarding long-term timber leases, we conducted a survey of landowners from Wetzel county, West Virginia. No long-term leases were reported by respondents, but 24% claimed they would enter a lease under certain conditions. The most frequently listed concern related to long-term timber leases was for the “loss of control”. Results of this survey are discussed in the light of forest management efforts that might be used to improve the social, financial, and environmental benefits for private forest owners.     

Performance of forest groups in achieving multifunctional forestry in Flanders

The forest group is a new policy instrument in Flanders (northern Belgium) to realise multifunctional forest management. This group was introduced in 1995 and organises the various kinds of forest owners, private as well as public, on a local basis (mean working area 751 km²), with voluntary participation (as in all forest owner organisations). This study evaluates forest groups in Flanders through an analysis of their relevance, effectiveness, utility and implementation. The targets of forest groups are relevant to the evolving needs and priorities at the local, regional, national and international level. The effectiveness analysis reveals that most indicators — including the quantity of timber harvest, the number of members, the forest area with an accepted management plan, the area under management and the area with small-scale ecological measures — have been improving between 1995 and 2004. The utility analysis emphasises that the owners are motivated because the forest group provides information and increases knowledge, includes the owner into a collective management plan, offers a platform for sharing management experiences and acts as a union force against the government. However, the forest group is not the solution to introduce multifunctional forest management by all forest owners. The implementation analysis identifies a number of impeding factors, including the imbalance between rights and duties, inconsistencies between various policy aims, and failure of forest groups to act as a common forum for all stakeholders in their working area.     

Technical efficiency in timber production and effects of other income sources

In Norway, as in many other European countries, income from forestry has become marginal to owners’ household economies and most employment of forest-owner households is now undertaken off the property. Also, many forest owners have focused increasingly on other revenue-earning activities on their properties, such as providing recreational services. It is a challenge in all kinds of production to find the optimal way of converting inputs into outputs, i.e., to be technically efficient. Extent of financial dependency on income from forestry differs between part-time and full-time forest owners. Since the two groups have different livelihood strategies, it is plausible that full-time forest owners have more professional forest management practices. Data for a cross-section of 3,249 active (i.e., harvesting) forest owners were extracted from the 2004 Sample Survey of Agriculture and Forestry representing the year 2003. A stochastic production frontier analysis was applied to evaluate forest management efficiency impacts of important factors including property and owner characteristics, outfield-related and agricultural activities, off-property income and geographical location in central or remote areas. It was found that many forest owners are technically inefficient, and there exist opportunities for improved performance. Off-property income was found to have an estimated negative impact on technical efficiency, the inefficiency arising (weakly) with increasing share of household incomes from outfield activities, and properties in urban centred areas are less efficient than those in remote areas. One policy implication of the study is that a potentially substantial efficiency increase might be achieved from allowing small inefficient woodlots to merge into larger units of forestry production. Also, providing support for forest management plans may improve efficiency.     

Family Forest Owners’ Commitment to Service Providers and the Effect of Association Membership on Loyalty

Long-term relationships with family forest owners willing to sell roundwood are important for the Nordic forest industry. Research has shown that customer loyalty is mediated by a sense of commitment to the service provider. At least two forms of commitment have been distinguished: affective commitment in the sense of liking the provider, and calculative commitment in the sense of being dependent on the provider. In Sweden, more than one-third of family forest owners are members of a forest owners’ association with the primary objective of supporting its members’ profitability. The associations buy one-third of the owners’ roundwood. This study examined the role of different forms of commitment in the process of becoming loyal timber suppliers, and the moderating role of membership. A questionnaire was sent to forest owners who notified the authorities of a final harvesting operation involving timber procurement by an organization. The results show that both forms of commitment significantly affected loyalty and the forms were correlated. Members of forest owners’ associations who sold their timber to the association expressed higher affective commitment and loyalty than other forest owners, indicating that a sense of member involvement is important for timber procurement by the associations.     

An approach for examining the effects of preferential uncertainty on the contents of forest management plan at stand and holding level

A proper forest planning process includes the assessment of the decision-makers’ preferences concerning the future forest use. For some owners, it may be a difficult task to express their preferences exactly and in the form that is required for planning calculations. This study presents a new kind of approach for analyzing the effects of preferential uncertainty. The approach consists of examination of the differences in the actual decision variables in forest planning, i.e. selected treatments for stands between holding-level forest plans. In example calculations, the preferential uncertainty was examined from three different viewpoints: the uncertainty in the weights of the objective variables; the uncertainty in the partial utility function; and the combination of these two uncertainty sources. One thousand preference realizations were generated for each of these uncertainty sources. More than one treatment schedules are proposed for stands that are affected by preferential uncertainty. These stands were detected from among the resulting set of 1,000 forest plans. With this done, two potential decision-making strategies, an adaptive behavior strategy and a threshold proportion strategy, were applied as guides in decision-making for stands, which have more than one treatment alternative selected in the produced optimal forest plans. The adaptive behavior technique required that the forest owner select one treatment alternative for at least one stand that has more than one proposed treatment alternative. The treatment alternatives having frequencies exceeding the given threshold frequency were all accepted simultaneously in the threshold strategy. The main benefit of the approach is to present the effects of uncertainties in a way that can be easily understood by the actual decision-makers. It is a promising tool for practical decision-making situations because at least Finnish non-industrial private forest owners quite often focus on making stand-level forest management decisions. It is also suitable for examinations of other uncertainty sources such as timber prices or inventory data.