Date of Award

8-2014

Level of Access

Campus-Only Thesis

Degree Name

Master of Science (MS)

Department

Forest Resources

Advisor

Aaron R. Weiskittel

Second Committee Member

Robert J. Lilieholm

Third Committee Member

Donald G. MacKay

Abstract

Over the past two decades the Northeast United States has experienced a drastic increase in transaction volume of timberland parcels. With the change in ownership from vertically integrated forest products manufacturers to alternative investment vehicles, the valuation process for these forests has needed to adapt. The goal of this thesis is to focus on two aspects of the acquisition and disposition process with regards to timberland investment. The first aspect is the valuation of a specific timberland parcel. An effort was made to accurately predict timberland parcel sales price through developing a model based on the value of the standing timber, parcel size and the state in which the parcel is located. The results of this model for the Northeast United States showed, as expected that standing timber value positively and parcel size negatively influences timberland sales price.

Timberland investment in the Northeast United States has historically relied heavily on accurate valuation of the standing timber on a given property in order to value the property. Several methods can be used to determine the standing volume and value for a given stand of timber. This thesis quantified the variation around these alternative methods in order to determine the inherent investment risk associated with this variation. Three specific portions were analyzed in this thesis including alternative (1) height prediction models, (2) volume equations, and (3) merchandising functions. The results of this analysis showed statistically significant differences between the Forest Vegetation Simulator (FVS), the Acadian Growth and Yield Model, and a combination of both. The Acadian Growth and Yield Model estimated the most conservative timber volumes and values, while FVS predicted the highest timber volumes and values.

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