The unresolved problem of determining the forest interest rate

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10.2478_ffp-2018-0012.pdf (1.4 MB)

Date

2018-07-20

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Sciendo (De Gruyter)

Abstract

Valuation of forests and their components is a significant problem, both for science and practice. At present, in many countries, the market of forest property is limited. As a result, no conclusions may be inferred on the forest value based on the information on forest purchase and sale transactions. In this situation, we apply static methods of forest valuation. The problem of forest statics has been discussed for years (e.g., Brukas et al. 2001; Chang 1983, 2001; Dieter 2001; Hartman 1976; Manley and Bare 2001; Mohring 2001; Zhang 2001; Viitala 2016). Static methods of forest valuation are well known. In the construction of the proposed mathematical formula (Eq. 6), the Faustmann theory was applied, concerning the economic equilibrium in forestry. Numerous modifications of his equation for economic equilibrium were used to develop, for example, an income method for forest valuation based on discounting the final value or prolongation of initial value. The forest interest rate is a key element in these equations. At present, there are no procedures for the establishment of this interest rate, which would be generally accepted by the scientific community. Therefore, the article presents and discusses selected concepts for determining the forest interest rate.

Description

© 2018 Krzysztof Adamowicz, published by Sciendo. This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License - https://creativecommons.org/licenses/by-nc-nd/4.0/legalcode . The Version of Scholarly Record of this Article is published in Folia Forestalia Polonica, Series A – Forestry, 2018, Vol. 60 (2), 122–130, available online at https://sciendo.com/article/10.2478/ffp-2018-0012 . Keywords: forestry economics, value, forestry rate.

Keywords

Research Subject Categories::FORESTRY, AGRICULTURAL SCIENCES and LANDSCAPE PLANNING::Area economics::Forest economics

Citation

Adamowicz, K. (2018).The unresolved problem of determining the forest interest rate. Folia Forestalia Polonica, 60(2) 122-130. https://doi.org/10.2478/ffp-2018-0012

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https://hdl.handle.net/20.500.14096/88

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Forest Sciences