Risk and the discount rate in forestry
作者:
W. David Klemperer,
James F. Cathcart,
Thomas Häring,
Ralph J. Alig,
期刊:
Canadian Journal of Forest Research
(NRC Available online 1994)
卷期:
Volume 24,
issue 2
页码: 390-397
ISSN:0045-5067
年代: 1994
DOI:10.1139/x94-052
出版商: NRC Research Press
数据来源: NRC
摘要:
One of the most common ways to account for investment risk is to add a risk premium to the risk-free discount rate when computing present values of expected revenues which are uncertain. Using certainty-equivalent analysis, we show that the correct risk premium for short-term investments can easily be in the commonly used 7-percentage-point range. But for such risk premiums to be appropriate for long-term forestry investments, the necessary certainty-equivalent conditions often seem to be unreasonably restrictive. Results suggest that the appropriate risk premium may decline with lengthening payoff period for many forest investments. Limited empirical data provide tentative support, but more research is needed to resolve the issue. We review policy implications and suggest areas for further research.
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