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New Zealand Journal of Forestry (1978) 23(1): 49–63
©New Zealand Institute of Forestry

Research article
Futher comment on the Forestry Development Plan for Otago

T.Fraser and G.P. Horgan

Volume 22, No. 1 (1911) of this journal contained disagreement between Grant and Collins et al. over the evaluation of social benefits in the Forestry Development Plan for Otago. An examination of the main points supports Grant's criticism. The population forecast used to derive migration data which form the basis for the evaluation of social benefits is found to have been misused. This error is compounded by the misinterpretation of the derived migration pattern. In the absence of data specific to the establishment of a forest industry in Otago, it is impossible to predict the exact value of the employment multiplier. This uncertainty should have been recognised in the Plan, and the sensitivity of the results tested. Allowance should have been made for the overvaluation of the exchange rate in calculating the saving in protection costs resulting from the establishment of an export-orientated forest industry. Moreover, the framework of the cost-benefit analysis is incomplete, mainly because of the omission of the costs and benefits directly associated with processing. As a result, the case for afforestation and wood processing in Otago is found to be not proven.
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