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

Fil: Broz, Diego Ricardo. Universidad Nacional de Misiones. Facultad de Ciencias Forestales; Argentina.

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Detalles Bibliográficos
Autores principales:	Broz, Diego Ricardo, Milanesi, Gastón, Rossit, Daniel Alejandro, Rossit, Diego Gabriel, Tohmé, Fernando Abel
Formato:	Artículo publishedVersion
Lenguaje:	Inglés
Publicado:	De Gruyter Open Ltd. 2018
Materias:	Real options Binomial model Binomial tree
Acceso en línea:	https://hdl.handle.net/20.500.12219/4987
Aporte de:	Repositorio Institucional Digital de la UNaM (RIDUNAM) de Universidad Nacional de Misiones

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record_format	dspace
spelling	I77-R195-20.500.12219-49872024-05-13T13:19:39Z Forest management decision making based on a real options approach: An application to a case in northeastern Argentina Broz, Diego Ricardo Milanesi, Gastón Rossit, Daniel Alejandro Rossit, Diego Gabriel Tohmé, Fernando Abel Real options Binomial model Binomial tree Fil: Broz, Diego Ricardo. Universidad Nacional de Misiones. Facultad de Ciencias Forestales; Argentina. Fil: Broz, Diego Ricardo. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina. Fil: Milanesi, Gastón. Universidad Nacional del Sur. Departamento de Ciencias de la Administración; Argentina. Fil: Rossit, Daniel Alejandro. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico. Instituto de Matemática (Bahía Blanca); Argentina. Fil: Rossit, Daniel Alejandro. Universidad Nacional del Sur. Departamento de Matemática. Instituto de Matemática (Bahía Blanca); Argentina. Fil: Rossit, Diego Gabriel. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico (Bahía Blanca). Instituto de Investigaciones Económicas y Sociales del Sur; Argentina. Fil: Rossit, Diego Gabriel. Universidad Nacional del Sur. Departamento de Economía. Instituto de Investigaciones Económicas y Sociales del Sur; Argentina. Fil: Tohmé, Fernando Abel. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico. Instituto de Matemática (Bahía Blanca); Argentina. Fil: Tohmé, Fernando Abel. Universidad Nacional del Sur. Departamento de Matemática. Instituto de Matemática (Bahía Blanca); Argentina. Fil: Tohmé, Fernando Abel. Universidad Nacional del Sur. Departamento de Economía; Argentina. 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. 2018-04-25 info:eu-repo/semantics/article info:ar-repo/semantics/artículo info:eu-repo/semantics/publishedVersion https://hdl.handle.net/20.500.12219/4987 eng info:eu-repo/semantics/altIdentifier/urn/https://mi.emu.ee/et/teadusinfo/metsanduslikud-uurimused/contents/2017/vol-67/ info:eu-repo/semantics/openAccess application/pdf application/pdf 452.1 KB De Gruyter Open Ltd.
institution	Universidad Nacional de Misiones
institution_str	I-77
repository_str	R-195
collection	Repositorio Institucional Digital de la UNaM (RIDUNAM)
language	Inglés
topic	Real options Binomial model Binomial tree
spellingShingle	Real options Binomial model Binomial tree Broz, Diego Ricardo Milanesi, Gastón Rossit, Daniel Alejandro Rossit, Diego Gabriel Tohmé, Fernando Abel Forest management decision making based on a real options approach: An application to a case in northeastern Argentina
topic_facet	Real options Binomial model Binomial tree
description	Fil: Broz, Diego Ricardo. Universidad Nacional de Misiones. Facultad de Ciencias Forestales; Argentina.
format	Artículo Artículo publishedVersion
author	Broz, Diego Ricardo Milanesi, Gastón Rossit, Daniel Alejandro Rossit, Diego Gabriel Tohmé, Fernando Abel
author_facet	Broz, Diego Ricardo Milanesi, Gastón Rossit, Daniel Alejandro Rossit, Diego Gabriel Tohmé, Fernando Abel
author_sort	Broz, Diego Ricardo
title	Forest management decision making based on a real options approach: An application to a case in northeastern Argentina
title_short	Forest management decision making based on a real options approach: An application to a case in northeastern Argentina
title_full	Forest management decision making based on a real options approach: An application to a case in northeastern Argentina
title_fullStr	Forest management decision making based on a real options approach: An application to a case in northeastern Argentina
title_full_unstemmed	Forest management decision making based on a real options approach: An application to a case in northeastern Argentina
title_sort	forest management decision making based on a real options approach: an application to a case in northeastern argentina
publisher	De Gruyter Open Ltd.
publishDate	2018
url	https://hdl.handle.net/20.500.12219/4987
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Forest management decision making based on a real options approach: An application to a case in northeastern Argentina

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