Wood product differentiation in age-structured forestry

We develop the classic market-level, age-structured forest model by extending the description of forestry output from homogenous wood to a set of differentiated outputs such as sawlogs and biofuels. The extension changes several most established results on the long-run sustainable market equilibrium of forestry. We show the existence of an optimal steady state with two (or more) simultaneous rotation periods. This equilibrium yields a smooth timber flow without normal forest structure and thus deviates from existing normal forest results as well as results on equilibrium cycles. We further show that the optimal rotation structure depends on wood product demand and the demand for land outside forestry, another feature that is absent in previous model formulations.