Forest management decision making based on a real options approach: An application to a case in northeastern Argentina

Q4 Agricultural and Biological Sciences
D. Broz, Gastón Silverio Milanesi, D. Rossit, D. Rossit, F. Tohmé
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引用次数: 2

Abstract

Abstract The Net Present Value (NPV) approach is widely applied to assess forest investments, but this method has serious shortcomings, which we propose to overcome by switching to the assessment through the Real Options Approach (ROA). The model in this paper starts with the simulation of the forest’s growth, combined with the projection of the products’ prices and valuing the assets using a binomial model. We include an option of postponement, determining the optimal period of felling. We find that ROA is more robust than the NPV approach because it relaxes the assumption of constancy of both the prices and the discount rate, allowing the determination of the optimal time of felling based on the growth rate of either the forest or the prices of its products. Contrary to the traditional NPV approach, the results obtained with ROA exhibit longer harvest turns and consequently higher profits. The key variable in the ROA, the Real Option Value (ROV) can be shown to be less (albeit moderately) sensitive to decreases of the discount rate than NPV. Moreover, ROV is moderately sensitive to decreases in the price of logs and is negligibly affected by rises in the costs of harvesting, loading and transporting rolls.
基于实物期权方法的森林经营决策:在阿根廷东北部案例中的应用
摘要净现值法(NPV)被广泛应用于森林投资评估,但该方法存在严重的缺陷,本文建议通过实物期权法(ROA)进行评估。本文的模型从模拟森林生长开始,结合产品价格的预测和使用二项模型对资产进行估值。我们包含了延期的选项,以确定最佳的采伐期。我们发现,ROA比NPV方法更稳健,因为它放宽了价格和贴现率不变的假设,允许根据森林的增长率或其产品的价格确定最佳采伐时间。与传统的NPV方法相反,用ROA获得的结果显示更长的收获周期,从而获得更高的利润。与NPV相比,ROA的关键变量实物期权价值(ROV)对贴现率下降的敏感性更低(尽管是适度的)。此外,ROV对原木价格的下降较为敏感,而对采收、装载和运输成本上升的影响可以忽略不计。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
Forestry Studies
Forestry Studies Agricultural and Biological Sciences-Forestry
CiteScore
0.70
自引率
0.00%
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