The study presents a physical and economic evaluation of commercial volume losses due to the attack of Rhyacionia buoliana (Schiff) on Pinus radiata (D. Don) plantations in the IX and X regions of Chile in 1995. The economic impact of the insect on the optimal rotation of stands is evaluated using the Land Expectation Value criterion. Different conditions of damage are related to stem defects caused by the insect. Three plantation ages and two site indices are considered with information about diameter, total height and defect height. Volume yields were projected with moth damage (defined as one or more defects below the commercial height of the stem) and without moth damage (no defects due to the moth). This methodology allows us to represent the impacts of the defects as a commercial volume differential. Yield projections were made using silvicultural regimes commonly used in private industrial plantations. The results are presented in three stages. First, a statistical analysis to determine the influence of the site index, the age of the plantation and the region on total height, frequency and type of defects. Second, calculation of volume differentials between a healthy plantation and one with R. buoliana damage. Finally, the economic impact of the moth is determined by comparing the Land Expectation Values.