What types of treatments are you considering?

There is much work on fungal interactions with fresh minerals in forest that use SEM to good advantage. A place to start a search would be: Balogh_Brunstad et al. 2008; Biogeochemistry 88: 153-167

Many potential silvicultural treatments might be used to change, accelerate change, or maintain tree and stand conditions. Those that are typically used to foster improved tree growing conditions and/or improved growth and yield include:

Choice of species and site

Site preparation

Planting

Spacing

Weeding & Cleaning

Thinning

Pruning

Fertilization

Logging slash distribution

The combination of treatments used in a silvicultural system can have large impact on growth and future yields.

Most certainly yes; SEM can be applied to any natural phenomena, to detect causal effects. There is in fact a book written by James Grace with applications from forestry and related fields, see e.g. his ch. 1 example concluding: "the biggest impact on

changes in spurge density was from self thinning, with A. lacertosa having a

modest effect on spurge and A. nigriscutis having no impact at all." (p. 33); or 'Relating soil properties to plant growth' (p. 110).

Grace, J. B. (2006). Structural equation modeling and natural systems: Cambridge University Press.

See other Grace work with SEM:

Grace, J. B. (1999). The factors controlling species density in herbaceous plant

communities: an assessment. Perspectives in Plant Ecology, Evolution and Systematics,

2, 1–28.

Grace, J. B. (2001). The roles of community biomass and species pools in the regulation of plant diversity. Oikos, 92, 191–207.

[THIS IS A SEM CLASSIC] Grace, J. B. (2003a). Comparing groups using structural equations. chapter 11, pp. 281–296. In: B. H. Pugesek, A. Tomer, & A. von Eye (eds.). Structural Equation

Modeling. Cambridge: Cambridge University Press.

Grace, J. B. (2003b). Examining the relationship between environmental variables and ordination axes using latent variables and structural equation modeling. chapter

7, pp. 171–193. In: B. H. Pugesek, A. Tomer, & A. von Eye (eds.). Structural

Equation Modeling. Cambridge: Cambridge University Press.

Grace, J. B. & Guntenspergen, G. R. (1999). The effects of landscape position on

plant species density: evidence of past environmental effects in a coastal wetland.

Ecoscience, 6, 381–391.

Grace, J. B.&Jutila, H. (1999). The relationship between species density and community biomass in grazed and ungrazed coastal meadows. Oikos, 85, 398–408.

Grace, J. B. & Keeley, J. E. (2006). A structural equation model analysis of postfire

plant diversity in California shrublands. Ecological Applications, 16, 503–514.

Grace, J. B. & Pugesek, B. (1997). A structural equation model of plant species richness and its application to a coastal wetland. American Naturalist, 149, 436–460.

Grace, J. B. & Pugesek, B. H. (1998). On the use of path analysis and related procedures for the investigation of ecological problems. American Naturalist 152, 151–159.

Grace, J. B., Allain, L.,&Allen, C. (2000). Factors associated with plant species richness in a coastal tall-grass prairie. Journal of Vegetation Science, 11, 443–452.

Grime, J. P. (1973). Competitive exclusion in herbaceous vegetation. Nature, 242,

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Balogh-Brunstaddid not seem to use SEM in their piece, but some anbalysis of variance of changes in several outcomes, I think:

Balogh-Brunstad said: "The significance of differences in the effects of bacteria and fungus, pine, and the presence or absence of ectomycorrhizae on pine was determined by analyses of variance (SAS 2004)." (p. 157)

Ha, I use SEM to mean Scanning Electron Microscopy,  Structural Equation Modeling is not my first thought when I see that acronym. Sorry about that.

Because of its capabilities for confirmatory& exploratory modelling , It is a good statistical tool .Considering the variety of factors influencing forest management , it can easily be recommended as a forest management tool for designing silvicultural treatments. However, as we all know not much studies are available regarding application of these tools for forest management in Tropical conditions. There is quite a lot of scope for using SEM  in forest management. Thanks a lot to Prof. Eugen Lordache for highlighting the scope of this tool.