Date of Award


Level of Access Assigned by Author

Open-Access Thesis

Degree Name

Master of Science (MS)


Forest Resources


David B. Field

Second Committee Member

Thomas B. Brann

Third Committee Member

Bret P. Vicary


Throughout the past two decades, investors have become increasingly interested in forestland investment. During this time, land has been bought and sold at an increasing pace in the Northeast. Many of the buyers and sellers are interested in timberland exclusively as an investment. This study was divided into two sections. Part one used statewide stumpage data for 17 species-product combinations fiom 1960- 1 999 to explore the impact of property taxes, federal income tax and favorable capital gains treatment on real, after-tax rates of return to forest land in Maine. Property taxes, income taxes, and favorable capital gains taxes were varied to allow estimates of returns under conditions that ranged fiom the worst for investment purposes to the best. In addition, this study looked at how timberland compares with other investments over long periods of time. Returns on timber were compared with returns published in the long-term study of stocks and bonds developed by Ibbotson and Sinquefield. The program to calculate internal rates of return and market risk was written in Visual Basic, with the data stored in Microsoft Access and the output stored in Microsoft Excel. Part two of the study looked at an actual investment-grade timberland property in the New York/New England region to compare the results from a real piece of land with the Maine statewide averages reported in part one. The study looked at the return on investment from 1970-1999. The focus was on how the average, annual, nominal rates of return have changed over time. The Capital Asset Pricing Model was used to evaluate relationships between risk and expected return and to calculate the beta. Finally the property was compared to other common timber indexes as well as other types of investments.