WHAT IS THE VALUE OF STANDING TIMBER - DIFFICULTIES IN MERGING THEORYWITH REALITY

Traditional residual conversion return methods of stumpage appraisal, although consistent with economic theory, are not appropriate for the forestry sector in Canada. Imperfect competition, dynamic residual val ues, and the forest tenure system pose complications which prevent suc h methods from adequately representing stumpage values. In developing new stumpage fee systems, decision makers will have to consider these complications and assess whether and how residual conversion return me thods may be adjusted to adequately reflect the value of standing timb er.