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Forest Economics and Finance

FOR 440 FOREST ECONOMICS AND FINANCE (3) FOR 440 syllabus (Please note that syllabi are subject to change and this may not be the most current syllabus.)

This course is designed to provide a working knowledge of the primary economic factors affecting the forestry profession relative to consumption, production, employment, tax obligations, and long-term debt.  Students should have completed coursework in microeconomics before taking this core course in the forest science curriculum.  The objective of the course is for students to recognize the structure and rationale for resource selections and usage in our capitalistic economy and to practice the short and long term economic decisions made within forest resources management.  The course is initiated with a review of the economic functions served by the major macro sectors in the US economy and the allied exchanges between these sectors, particularly with regards to the control and ownership of forest resources, the production and exchange of forest products and services, and the concept of public goods.  Initially, the course is oriented to the short run analysis of demand and production functions, largely to identify the characteristic rationale of a market equilibrium and allied resource allocations. This includes market structures typical to forest resource settings, the limits of individual producers in affecting input and output prices, and their relationship to allied marginal values.  From an accounting viewpoint, the course introduces the structure and function of the annual statement of earnings and the balance sheet, and their interdependence. Forestland values and costs are specified within the context of these accounting statements, with an emphasis on property taxes, alternatives thereof, depletion, and cash flow.  The long run view toward forest investments is introduced via the role of discounting in the investment process, and the relative impact of interest rates and time within this valuation process. This permits the further analysis of forest rotations relative to costs and revenue gains, the bias inherent to alternate length options, and the solution provided through soil expectation values.  As a summary, the financial limits of discount analysis are considered relative to long-term forest resource decisions and the implied means by which public sectors circumvent these limits.  Evaluation methods include exams, quizzes, and lab assignments.  This course is offered every spring.