Generalization of Faustmanrfs Formula for Stochastic Forest Growth and Prices with Markov Decision Process Models

@inproceedings{Buongiomo2004GeneralizationOF,
  title={Generalization of Faustmanrfs Formula for Stochastic Forest Growth and Prices with Markov Decision Process Models},
  author={Joseph Buongiomo},
  year={2004}
}
  • Joseph Buongiomo
  • Published 2004
Faustmann's formula gives the land value, or the forest value of land with trees, under deterministic assumptions regarding future stand growth and prices, over an infinite horizon. Markov decision process (MDP) models generalize Faustmann's approach by recognizing that future stand states and prices are known only as probabilistic distributions. The objective function is then the expected discounted value of returns, over an infinite horizon. It gives the land or the forest value in a… CONTINUE READING
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