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The dynamics of wood productivity on drained peatland sites was analyzed from the covariance structure generated by stand yield data of repeatedly measured permanent sample plots in 81 Scots pine (Pinus sylvestris L.) or Norway spruce (Picea abies Karst. (L.)) stands with admixtures of birch (Betula pubescens Ehrh.). The site production potential, considered a latent variable, was assumed to follow an autoregressive process over time elapsed since drainage. As a measure of the latent variable, a relative growth rate (RGR) index was determined for all stands at the time of drainage and at four successive measurement time points following drainage (on average 16, 23, 30, and 41 years). The index was calculated as the site index of an upland conifer stand with the ratio of periodic volume growth and standing volume and adjusted by changes in stand stocking and thinning. The observed covariance structure was described by fitting a structural equation model to the data of RGR indices. When only the post-drainage measurement times were included, a quasi-simplex model with equal error variances and equal structural parameters at different measurement times fit the data well indicating a permanent covariance structure among the different measurements. Including the measurement at the time of drainage resulted in a non-permanent structure. The stand parameters at the time of drainage were poorly correlated with post-drainage growth. A considerable increase in the wood productivity of the sites was observed, being greatest during twenty years after drainage and continuing up to 40 years since drainage. This was concluded to be due to changes in site properties rather than stand structure although the effects of the single factors could not be analytically separated from one another. Our modelling approach appeared to improve long-term site productivity estimates based merely on botanical site indices.