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Ghani et al. (1992) present the only known rigorous concession-level empirical analysis of concessionaire behavior.
Where this risk is low, governments that wish to discourage concessionaires from violating annual allowable logging areas must couple area fees with measures that counter their depletion-accelerating effects.
Most argue that royalties may be too low, resulting in underpricing of the forest resource, reducing incentives for sustainable forest management, and generating windfall profits for concessionaires.
This is nearly 6 times the annual profit earned by a concessionaire who abides by the 30-year concession contract.
A concessionaire who is effectively (though not necessarily legally) free to choose annual harvest area thus might not be equally free to choose annual harvest volume.
Countries that wish to encourage concessionaires to comply with sustained-yield requirements must implement measures that counter the depletion-accelerating effects of area fees.
Although such a scheme may not induce rationalization of waste generation, collection costs are low and effective, and the concessionaire is encouraged to operate efficiently.
In summary, the model presented reflects one method the concessionaire may use to determine the optimal harvesting profile for a particular forest.
