2024-2025 / ECON2255-4

Forest economics

Duration

9h Th, 9h Pr

Number of credits

 Master in forests and natural areas engineering, professional focus2 crédits 

Lecturer

Gauthier Ligot

Language(s) of instruction

French language

Organisation and examination

Teaching in the second semester

Schedule

Schedule online

Units courses prerequisite and corequisite

Prerequisite or corequisite units are presented within each program

Learning unit contents

THEORY
Chapter 1: Principles for estimating the value of forests.


  • Concepts of values
  • Source of income and expenses
  • Discounted cash flow principle
  • Value/loss of future
  • Funds and area
  • Financial prejudice and compensation
Chapter 2: Implementing the assessment of the value of a forest for its timber-producing role


  • Computation of the forest expectation value and demonstration
  • he case of planted even-aged high forest
  • Case of naturally regenerated even-aged forest
  • The case of the uneven-aged forest
  • The case of irregular forest in transition
Chapter 3: Wood Production Performance Criteria


  • Average and total production
  • Return on investment
  • Benefit-cost ratio
  • net present value
  • net present value of infinite cash flows
  • Internal rate of return
  • Comparison and critique of the different criteria
Chapter 4: Assumptions for calculating the profitability of forest production


  • Discount Rate
  • Land expectation value
  • Risks and uncertainties
Chapter 5: Economics of silvivulture


  • Optimal revolution
  • Density and spacing
  • Protection
  • Silvicultural regime
Chapter 6: Evaluation of non-market services


  • Methods of arbitrage between market and non-market services
  • Illustration of multi-criteria valuation of ecosystem services
  • Discussion on stakeholder involvement
  • Discussion on the trade-off between different scenarios
  • Discussion on the relevance of economic and social evaluation methods
PRACTICAL
Computer exercises to be done with a spreadsheet software (e.g. MS Excel) to estimate the value of a forest, the value of forest damages, different indicator of forest profitability (TIR, BAS, BASI ...) or to perform a contingent valuation of ecosystem services.

Learning outcomes of the learning unit

At the end of this course, the student must master the basics of financial, economic and social evaluation of the management of a forest estate. More specifically, the student must be able to:
- Master (understand/use) the vocabulary used to assess the value or the profitability of a forest;
- Master the concept of discounting cash flows;
- Estimate the value of a forest or the amount of a loss based on cash flow;
- Calculate different profitability criteria (e.g. IRR, FEV, ...) to evaluate a forest investment;
- Evaluate and compare different forest investment projects, identify the most interesting investment and argue for this choice;
- To explain the assumptions used to calculate the value of a forest or profitability criteria; to put into perspective the importance of these assumptions on the result, for example by means of a sensitivity analysis;
- Describe the methods used to identify a multifunctional forest management scenario that is a good trade-off among the multiple goods and services provided by a forest;
- Criticize economic and social valuation methods.

Prerequisite knowledge and skills

Multifunctional management of forests
Forest products supply chain
Forest mensuration and forest inventory
Economics of natural ressources

Planned learning activities and teaching methods

Lecture:

  • Presentation with a visual support
  • Wooclap Polls
  • Feedback from formative tests conducted online before the session
  • Solving simple exercises
  • Presentations by other speaker(s)
  • Participatory Workshop
  • Discussion
Practical work:
  • Exercise resolution

Mode of delivery (face to face, distance learning, hybrid learning)

Lectures: 5 x 1h30 Practical works: 7 x 1h30

Course materials and recommended or required readings

Mandatory reading

  • Presentation slides
Recommended reading
  • Hébert J. (2019) Economie du patrimoine forestier. Course notes
  • Price, C. and Price, M. Cost-benefit analysis of continuous cover forestry, pp. 36-65.
Reference book
  • Price C. (1989) - The Theory and Application of Forest Economics

Exam(s) in session

Any session

- In-person

written exam ( open-ended questions )

- Remote

written exam ( open-ended questions )

Written work / report

Continuous assessment


Additional information:

First Session Assessment:

Group work report (30%)

Practical exam on PC (70%)

The evaluation is done at the end of the course, in March, using an eCampus form. The evaluation is done in the computer rooms (yellow and orange codes). During the evaluation, the students do not have access to other materials than the one provided.

In case of code red, the evaluation is done remotely with an eCampus form.


Second session exam:

Classroom evaluation (yellow and orange codes): The evaluation is done in the computer rooms. During the evaluation, the students do not have access to other materials than the one provided. (100 %)

In case of code red, the students submit a report. (100 %)

Work placement(s)

Organisational remarks and main changes to the course

Contacts

LIGOT Gauthier
Gembloux Agro-Bio Tech Passage des Déportés 2 5030 Gembloux Belgique
+32 81 622320 gligot@uliege.be

Association of one or more MOOCs