The results represent the sum of direct, indirect, and induced effects on employment resulting from the harvest changes on each Forest. The direct effect is the change in employment in the wood products manufacturing and timber supply sectors associated with changes in the sales of each sector to final demand. The indirect component consists of the changes in employment in all other sectors (with the exception of households) resulting from the changes in final demand sales of the wood products manufacturing and timber supply sectors. Not all the direct, indirect, and induced employment changes associated with changes in road construction are included in the employment results; however, correcting the results to reflect the omissions would likely add less than 10 percent to the employment impacts for each study Forest.

Increases in dispersed, nonmotorized recreation-related employment which would result from all the roadless areas remaining in a roadless status are likely to be small and, to varying degrees, offset by employment losses from decreases in dispersed, motorized recreation-related employment. No attempt is made to estimate the total effect on employment of changes in in-lieu tax payments to counties.

The magnitude of person-years of employment per million cubic feet of timber harvested differs from one Forest to another primarily because of differences in the structure of the economies located within the input-output areas. As indicated by the preceding discussion, the reported impacts on employment are probably conservative estimates of the local impacts of the harvest level-land base changes.

The actual level of timber-related employment in the local economy is based on the recent volume of chargeable harvest from the study Forest and other sources of timber. The employment consequences, which are directly proportional to the harvest changes, are quantified as deviations from the direct, indirect, and induced level of employment that is attributable to the base programed harvest. To the extent that the base programed harvest is greater than the recent volume of chargeable harvest, employment reductions stemming from harvest reductions represent decreases in opportunities to expand employment rather than decreases in the level of actual employment.

FINANCIAL CONSEQUENCES-SUMMARY OF FINDINGS

The financial and employment effects of removing roadless areas from the land available for timber management and reallocating the savings in road costs to more intensive management of the remaining land were derived for each study Forest. Using expected trends in real costs and real stumpage prices, we computed the results shown in the next section. The trend in real stumpage prices was based on the assumption that, with the exception of the National Forest for which the results were reported, there would be no harvest changes caused by roadless area withdrawals on any of the National Forests in the Pacific Northwest. Financial consequences calculated for two additional price and cost assumptions are shown in appendixes D and E and are discussed in the

next section.

Table 8 shows the effects of the key alternatives on present net worth, receipts to counties, and local employment. On the Willamette and Siskiyou National Forests, the reductions in financial values were quite large when all the roadless areas were removed from the land base available for timber management. On the Umatilla, the changes were smaller. On the Willamette, when half the roadless area was withdrawn and funds were reallocated to intensify timber management on the area with roads, present net worth increased.

EMPLOYMENT CONSEQUENCES

SUMMARY OF FINDINGS

Changes in employment related to changes in timber harvest are variable between forests (table 8). This results both because changes in harvest vary and because the amount of employment per million cubic feet of harvest vary.

FINANCIAL AND EMPLOYMENT RESULTS ON STUDY FORESTS

The presentation of financial results in tables 9, 10, and 11 (also see appendixes D and E) shows the gross revenue and payments to counties for the base programed harvest. It shows the change in gross revenue, costs, net revenue, payments to counties, and present net worth10 for reallocation alternatives compared with the base programed harvest. The change in costs associated with the reallocation alternatives has been estimated. The costs for roads in the accessible areas, administrative overhead, and many other costs associated with the base programed harvest have not been estimated. Therefore, we cannot show or

10.

When the Forest harvest changes are large enough to cause local price changes, present net worth is not the most relevant measure of the change in social welfare. Discounted net social benefit, or the discounted sum of consumers' and producers' surplus, is a more relevant criterion (McKean 1958, Prest and Turvey 1967). Net social benefit represents the difference between what society would be willing to forgo rather than go without the commodity (benefits) and the costs, exclusive of rents, which it must actually incur to produce the commodity. The distinction between discounted net social benefit and present net worth is crucial in the inelastic portion of the demand curve, since present net worth will increase when discounted net social benefit decreases, and vice versa. In the present case, however, demand relationships are elastic and the effects on prices at the National Forest level are so small that present net worth is a very close approximation to discounted net social benefit.

Table 8--Change in present net worth (PNW), payments to counties, and employment between, the base programed

harvest and the reallocation alternatives

1

'Based on trends in real prices expected with no changes in harvest on other National Forests and expected
trends in real costs.

areas.

2Alter

Alternatives show percent of the total roadless area withdrawn from a timber base that includes all roadless

3 Averages for the first 4 decades in 1978 constant dollars.

Table 9--Four-decade average financial and employment effects of withdrawing roadless areas and reallocating funds to intensive management, Willamette National Forest 1 2

4.

5.

Cost of selling timber (million dollars

Table 10--Four-decade average financial and employment effects of withdrawing roadless areas and reallocating funds to intensive management, Siskiyou National Forest 1 2

Harvest (million cubic feet per year)
Gross revenue (million dollars per year)
Cost of roads (million dollars per year)

-.7

-2.1

4.

6.

Net revenue--item 2 minus items 3, 4, and 5 (million dollars per year)

NA

-7.0

-17.0