Graduate Research and Discovery Symposium (GRADS)
Advisor
Scott Templeton
Document Type
Poster
Department
Applied Economics
Publication Date
Spring 2013
Abstract
Traditional methods of forest valuation assume that management behavior is fixed over time: each timber harvest occurs at a fixed future date regardless of the evolution of timber prices. This study incorporates option value - the ability to delay an irreversible decision - into forest land valuation through an adaptive harvesting strategy. When option value is ignored, long term investments are undervalued. The optimal adaptive harvesting strategy increases the net present value of land between 29.7 and 35.1 percent relative to a fixed rotation strategy.
Recommended Citation
Campbell, Wallace A., "Option valuation of timberland under price uncertainty" (2013). Graduate Research and Discovery Symposium (GRADS). 33.
https://open.clemson.edu/grads_symposium/33