Faustmann formula before Faustmann in German territorial states

Viitala, Esa-Jussi

doi:10.1016/j.forpol.2015.11.004

Cited by 15 publications

(13 citation statements)

References 18 publications

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“…As it was reported by Viitala (2016), a common notion in forest and natural resource economics is that the celebrated 'Faustmann's formula' was discovered by a young Hessian forester Martin Faustmann in 1849 and that the 'Faustmann's rule' or Faustmann-Pressler solution to the optimal rotation age was derived from it a decade later by a distinguished professor of forest mathematics Max Robert Pressler (e.g., Crocker et al 2002;Gan et al 2001) Numerous modifications of this equation were used to develop the income method of forest valuation. Forest valuation is a science and an art.…”

Section: Introductionsupporting

confidence: 67%

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The unresolved problem of determining the forest interest rate

Adamowicz

2018

Folia Forestalia Polonica

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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 Chang , 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.

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Section: Introductionsupporting

confidence: 67%

“…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 Chang , 2001 Dieter 2001;Hartman 1976;Manley and Bare 2001; Mohring 2001; Zhang 2001;Viitala 2016). Static methods of forest valuation are well known.…”

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confidence: 99%

The unresolved problem of determining the forest interest rate

Adamowicz

2018

Folia Forestalia Polonica

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“…As it was reported by [26], a common notion in forest and natural resource economics is that the celebrated 'Faustmann formula' was discovered by a young Hessian forester Martin Faustmann in 1849 and that the 'Faustmann rule' or the Faustmann-Pressler solution to the optimal rotation age was derived from it a decade later by a distinguished professor of forest mathematics Max Robert Pressler (e.g., [30,31]). The Faustmann model is well accepted in economics [32,33], and it has a "myriad" of applications [23] with high practical relevance worldwide [34]; however, in a wide range of communities of forest and environmental scientists, forestry managers and other forestry-related stakeholders, there is still a very sceptical view towards this model.…”

Section: Static Methods Of Forest Valuationmentioning

confidence: 99%

“…The problem of a static approach to forests has been discussed for years, e.g., [21][22][23][24][25], Mohring (2001) and [26]. In the history of forest economics, the period of intensive development of the so-called forest statics may be described as the classical period, since it was influenced by the liberal free market economics of Adam Smith in the form of the science on appraisal of forest value and profitability of forest holdings based on a static notion of forest.…”

Section: Static Methods Of Forest Valuationmentioning

confidence: 99%

A Review of Selected Methods to Determine the Economic Value of Forest: Polish Research

Adamowicz¹

2018

New Perspectives in Forest Science

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Value is a multifaceted term, and for this reason, forest economics uses a set of various categories of forest value. Two basic categories of value, with which we deal in economics, are connected with market value and non-market value. Market value is specified by the market as a result of interactions of supply and demand. Occasionally, market value is referred to in Polish literature as exchangeable value and value in exchange. Non-market value is a value ascribed by consumers to a good or service, for which there is no real market. In such cases, many methods have been used over the years to appraise the value of forests. This study presents a synthetic review of scientific thought connected with forest valuation. Concepts of static and empirical schools are discussed, indicating the role of Polish scientists in the development of forest economics in terms of forest value appraisal.

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“…Daur Faustmann digunakan untuk menentukan daur optimal secara finansial apabila hanya mempertimbangkan kayu sebagai sumber pendapatan (Indrajaya & Siarudin, 2013). Daur Faustmann telah ditemukan cukup lama oleh ekonom Jerman (Viitala, 2016). Walaupun kritik akan teori Faustmann telah dilakukan, namun dalam teori kapital kehutanan, teori ini masih cukup relevan digunakan dalam maksimasi keuntungan tegakan hutan (Sauter et al, 2016).…”

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Optimal rotation of sengon plantation in afforestation project: Review on research results of Suharlan 1975

Indrajaya¹

2017

JPKW

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Hutan memiliki peranan yang penting dalam mitigasi perubahan iklim dengan menyerap karbon di atmosfer. Tambahan pendapatan dari penjualan jasa lingkungan penyerapan karbon dapat merubah manajemen optimal hutan tanaman. Penelitian ini bertujuan untuk menganalisis daur optimal produksi bersama kayu dan jasa lingkungan penyerapan karbon dari tegakan sengon di Pulau Jawa. Metode penelitian yang digunakan adalah metode Hartman yang merupakan modifikasi dari metode Faustmann untuk maksimasi keuntungan dari penjualan kayu dan jasa lingkungan penyerapan karbon. Hasil penelitian ini menunjukkan: (1) daur biologis hutan sengon pada bonita III dan IV berturutturut adalah 6 dan 5 tahun, (2) daur finansial hutan sengon pada bonita III dan IV adalah 8 dan 6 tahun, dan (3) penambahan penjualan jasa lingkungan karbon pada proyek aforestasi CDM tidak memperpanjang daur optimal finansial sengon. SQ III and IV are 8 and 6 years respectively, and (3) Additonal income from carbon sales in afforestation project will not lengthen the optimal rotation of sengon plantation.

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Faustmann formula before Faustmann in German territorial states

Cited by 15 publications

References 18 publications

The unresolved problem of determining the forest interest rate

The unresolved problem of determining the forest interest rate

A Review of Selected Methods to Determine the Economic Value of Forest: Polish Research

Optimal rotation of sengon plantation in afforestation project: Review on research results of Suharlan 1975

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