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Titolo:
Discount rate and harvest policy: implications for Baltic forestry
Autore:
Brukas, V; Thorsen, BJ; Helles, F; Tarp, P;
Indirizzi:
Royal Vet & Agr Univ, Dept Econ & Nat Resources, Unit Forestry, DK-1958 Frederiksberg C, Denmark Royal Vet & Agr Univ Frederiksberg Denmark C 58 Frederiksberg C, Denmark
Titolo Testata:
FOREST POLICY AND ECONOMICS
fascicolo: 2, volume: 2, anno: 2001,
pagine: 143 - 156
SICI:
1389-9341(200106)2:2<143:DRAHPI>2.0.ZU;2-W
Fonte:
ISI
Lingua:
ENG
Soggetto:
ECONOMICS; MODEL;
Keywords:
transition economy; Lithuanian forestry; economic analysis; discounting;
Tipo documento:
Article
Natura:
Periodico
Settore Disciplinare:
Agriculture,Biology & Environmental Sciences
Citazioni:
47
Recensione:
Indirizzi per estratti:
Indirizzo: Brukas, V Royal Vet & Agr Univ, Dept Econ & Nat Resources, Unit Forestry, 23 Rolighedsvej, DK-1958 Frederiksberg C, Denmark Royal Vet & Agr Univ 23 Rolighedsvej Frederiksberg Denmark C rk
Citazione:
V. Brukas et al., "Discount rate and harvest policy: implications for Baltic forestry", FOR POLICY, 2(2), 2001, pp. 143-156

Abstract

The free market economy, to which East European countries are increasinglybeing exposed, implies that classical budgeting techniques in the form of the Faustmann approach present themselves as the tools of choice for forestinvestment analysis. One implication is that the choice of a proper discount rate W must be made as part of the basis for formulating a harvest policy. The paper discusses this choice in the light of practice as well as theory, and, using Lithuania as a case, examines the potential economic and political impact of softening the current restrictions on forest management. Areview of the debate on discounting in forestry is provided. A statisticalanalysis of the relation between reported r values and internal rates of return (IRR) from numerous studies on forestry investments reveals a strong correlation between r and IRR. Possible explanations are provided. Analysisreveals that application of any positive r will significantly change forestry practice in Lithuania. Setting r = 3%, slow growing species are to be replaced by fast growing species, and rotation periods should be substantially shortened. The standing volume of (over-)mature forests is approximately160 million m(3), as compared with the currently harvestable volume of approximately 40 million m(3) according to the minimum allowable rotation age. The macroeconomic perspectives of cashing some of the mature forest for the small transition economy are discussed, taking into account the effects of externalities of forests. Consequently we suggest an alternative formulation of the normal forest. Finally, based on these considerations, a real r of 0-2% is suggested for State forestry in Lithuania. A post-tax r of 2% isadvocated for private forestry, with potential project specific deviationsdownward to 0 or upward to 4%. It is stressed that discount rate is viewedas one of the important decision parameters and due regard should be givento non-timber forest outputs, social and institutional settings and other factors. (C) 2001 Elsevier Science B.V. All rights reserved.

ASDD Area Sistemi Dipartimentali e Documentali, Università di Bologna, Catalogo delle riviste ed altri periodici
Documento generato il 23/01/20 alle ore 03:47:29