Two strategies for boreal forestry with goodwill in capitalization

TL;DR

This paper compares two forestry strategies involving goodwill in estate capitalization, finding that a real estate-focused approach is financially better, especially when land end users are present, with implications for stand management.

Contribution

Introduces and evaluates two strategies for boreal forestry with goodwill, highlighting the superiority of the real estate approach under certain market conditions.

Findings

RE strategy is financially superior to TS.

Presence of land end users is crucial for RE feasibility.

Commercial thinnings can extend stand rotation times.

Abstract

Two strategies for boreal forestry with goodwill in estate capitalization are introduced. A strategy focusing on Real Estate (RE) is financially superior to Timber Sales (TS). The feasibility of the RE requires the presence of forest land end users in the real estate market, like insurance companies or investment trusts, and the periodic boundary condition does not apply. Commercial thinnings do not enter the RE strategy in a stand-level discussion. However, they may appear in estates with a variable age structure and enable an extension of stand rotation times.