ZLV Online

Abstract

The objective of the paper is to analyse the issue of forest land valuation from its origin till the present with the emphasis upon detected differences between its deterministic and stochastic models considering their necessary innovations. At present, there are only deterministic methods for these purposes largely used in practice, despite the increasing risk of natural hazards occurrence within forestry induced by ongoing climate change. Several case studies inform that the observed impact of this risk on the forest land value is strong and can even lead to the infeasibility of forestry. Moreover, the results of deterministic calculations cannot serve as the correct measure of balance approached between supply and demand in the land market. The proposed innovation of methods concerning calculating the forest land expectation value is based on the introduction of procedures that take the risk of detrimental natural hazards occurrence into account. This means that mentioned deterministic models based on the Faustmann formula should be replaced by their stochastic counterparts, especially under conditions where the detected specific risk of forest management approaches the significant levels. The paper presents the list of references to prospective solutions on how to introduce these advanced forest valuation methods in practice.