On 189 years of confusing debates over the König-Faustmann formula

“On 189 Years of Confusing Debates over the König-Faustmann Formula” provides an exhaustive analysis on some theoretical problems affecting the calculation of the land value, the capital asset in forestry, and the inter-temporal decision of the optimal age for cutting the stand using the land expectation value formula (LEV). Several hidden assumptions and conditions have produced the co-existence of different LEV formulas, which generate different land asset values for the same even-aged clear-cut stand management problem. In addition, this confusion was also extended to the economic analysis of other continuous cover and more complex silvicultural systems. The aim of this research is to make an explicit distinction between the different LEV formulas based on different land rent theories, interpret the assumptions behind the mathematical models, and state the management problems that they want to define. Thus, it is also intended to present a unified framework for the applications of these LEV formulas in theoretical and empirical forest economics and to support managerial decisions. Moreover, this thesis examines possibilities and limitations for the three LEV formula applications for analyzing different silvicultural systems, and management problems under the latest sustainable forestry paradigm. Finally, some insights are presented in order to explain how the LEV formula as a static, stand-level, market based model can be used for analyzing dynamic, forest level and multiple-output applications.