<abstract xmlns="http://www.w3.org/1999/xhtml"><p>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., <xref ref-type="bibr" rid="j_ffp-2018-0012_ref_004_w2aab3b7b4b1b6b1ab1ab4Aa">Brukas et al. 2001</xref>; <xref ref-type="bibr" rid="j_ffp-2018-0012_ref_008_w2aab3b7b4b1b6b1ab1ab8Aa">Chang 1983</xref>, 2001; Dieter 2001; <xref ref-type="bibr" rid="j_ffp-2018-0012_ref_020_w2aab3b7b4b1b6b1ab1ac20Aa">Hartman 1976</xref>; <xref ref-type="bibr" rid="j_ffp-2018-0012_ref_027_w2aab3b7b4b1b6b1ab1ac27Aa">Manley and Bare 2001</xref>; <xref ref-type="bibr" rid="j_ffp-2018-0012_ref_034_w2aab3b7b4b1b6b1ab1ac34Aa">Mohring 2001</xref>; Zhang 2001; <xref ref-type="bibr" rid="j_ffp-2018-0012_ref_053_w2aab3b7b4b1b6b1ab1ac53Aa">Viitala 2016</xref>). 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.</p></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.

The unresolved problem of determining the forest interest rate

Folia Forestalia Polonica

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

{"article-title":"The unresolved problem of determining the forest interest rate"}

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...

The unresolved problem of determining the forest interest rate

Published Online: Jul 20, 2018

Page range: 122 - 130

DOI: https://doi.org/10.2478/ffp-2018-0012

Keywords
forestry economics, value, forestry rate

© 2018 Krzysztof Adamowicz, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

The unresolved problem of determining the forest interest rate

Published Online: Jul 20, 2018

Page range: 122 - 130

DOI: https://doi.org/10.2478/ffp-2018-0012

Keywordsforestry economics, value, forestry rate

© 2018 Krzysztof Adamowicz, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Keywords
forestry economics, value, forestry rate