Factors affecting partitioning of private forest holdings in Finland.

Questions of the small size of non-industrial private forest (NIPF) holdings in Finland are considered and factors affecting their partitioning are analyzed. This work arises out of Finnish forest policy statements in which the small average size of holdings has been seen to have a negative influence on the economics of forestry. A survey of the literature indicates that the size of holdings is an important factor determining the costs of logging and silvicultural operations, while its influence on the timber supply is slight. The empirical data are based on a sample of 314 holdings collected by interviewing forest owners in the years 1980-86. In 1990-91 the same holdings were resurveyed by means of a postal inquiry and partly by interviewing forest owners. The principal objective in compiling the data is to assist in quantifying ownership factors that influence partitioning among different kinds of NIPF holdings. Thus the mechanism of partitioning were described and a maximum likelihood logistic regression model was constructed using seven independent holding and ownership variables. One out of four holdings had undergone partitioning in conjunction with a change in ownership, one fifth among family owned holdings and nearly a half among jointly owned holdings. The results of the logistic regression model indicate, for instance, that the odds on partitioning is about three times greater for jointly owned holdings than for family owned ones. Also, the probabilities of partitioning were estimated and the impact of independent dichotomous variables on the probability of partitioning ranged between 0.02 and 0.10. The low value of the Hosmer-Lemeshow test statistic indicates a good fit of the model and the rate of correct classification was estimated to be 88 per cent with a cutoff point of 0.5. The average size of holdings undergoing ownership changes decreased from 29.9 ha to 28.7 ha over the approximate interval 1983-90. In addition, the transition probability matrix showed that the trends towards smaller size categories mostly involved in the small size categories, less than 20 ha. The results of the study can be used in considering the effects of the small size of holdings for forestry and if the purpose is to influence partitioning through forest or rural policy.