Browsing by discipline "Skogsekonomi"

Determining the market value of forest properties is needed for several purposes. In Finland the most used methods for valuation of forests are summation approach, income approach and market approach. Real estate valuation methods are standardized by the International Valuation Standards Council (IVSC). The council publishes standards that have been the premise for real estate valuation also in Finland. However, standard for the valuation of forests doesn’t exist due to significant problems in every method used. From International Valuation Standards Councils perspective valuation should always be market-based. Figures for the calculations should be derived from the market. This has been problematic for forest properties as the specific forest inventory data has been too expensive and difficult to collect. The new forest inventory data system of The Finnish Forest Centre, which is based on airborne laser scanning, creates new possibilities for combining the data with the market prices. This enables a better examination of the valuation methods used and a possibility for the creation of a standardized method. The purpose of this study was to compare the attributes and suitability of the most used valuation methods when determining the market value of forest properties. Research material of this study consists of 15 representative forest property transactions (areas over 10 hectares) from Central Finland and the laser scanning based inventory data of these properties. The attributes investigated were the size of correction from total value when using summation approach, the internal rate of return in the income approach, possible net income for the near future and the accuracy of these valuation methods. In addition, taxation of forest revenues, transfer taxes, administration costs of forests and trade costs were applied in examination of these methods. Processing and calculations of data were carried out with MELA, Motti, Tforest and Excel programs. The average internal rate of return was 5,3 percent and median 4,3 percent, which is similar to previous studies. Investments in forest properties are categorized to an average risk-return investment class. The correction from total value when using summation approach was similar to previous studies as it varied from -2 to -60 percent and was -26 percent on average (and -13 percent when expectation values were left out). The possible net income from these forest properties from the period of five years could cover 64 percent of market prices; however notable differences were among properties. When taking taxes, administration and trade costs into account the average internal rate of return sets down between 3 - 4 percent. The total value correction in summation approach is only -4,5 percent on average (+12,9 percent without expectation values). The problems of the valuation methods can be seen when looking at the accuracy of the methods. Standard deviation of every method varies from 25 - 35 percent when comparing them to the market values. Notable is that with a very simple method; multiplying the growing stock with the average stumpage prices, the results are as accurate as with more complex methods. The most accurate results for the whole research material were calculated with the income approach using 5 percent interest rate. Also using the summation approach and taking taxes, administration and trade costs into account was very accurate. More research is still needed for every method. Perhaps in practical valuation tasks the market value of forest properties should be investigated using multiple methods side by side, as IVSC has proposed. The results of this study are similar to previous studies and therefore support the intention for combining the new laser scanning based forest inventory data to the market prices. The use and research of extensive and up-to-date market data of forest properties could also open new possibilities in valuation of non-market benefits.

Over 60% of all the forest land in Finland is owned by private forest owners and most of these forests are owned by families. Private forest owners have been studied in Finland quite a lot, but there are still quite few studies about women owning forest land. The theory is based on previous Finnish, Swedish and American studies about female forest owners. The goals of this study were to describe women and their behaviour as forest owners as well as explore how they use forest consultation services, which background characteristics influenced the usage and how it differed from men’s behaviour. The data used in this study was Suomalainen metsänomistaja 2010 and it has been gathered during 2004-2008 via postal survey. The sample, 13,000, was divided into 13 forest centres. Valid responses were obtained 6318, so the percentage of responses was 49,2%. The background characteristics and behaviour of female forest owners were explored by using means and cross-tabs. Linear regression model and logit-model were used to describe the usage of forest consultation services and the background characteristics influencing it. On the supposition that the amount of the female forest owners has been under estimated in previous studies (25%), the purpose of this study is also to determine more exact number. Previously, the amount of female forest owners has been estimated on the strength of the respondent of the postal survey, but it hasn’t been taken into account that men are more likely to answer the survey than women. This study showed that 38% or 44% of all forest owners in Finland were women depending on the calculation method. Female forest owners were older and better educated than men, but they sold less wood as well as did less maintenance work and also their estates were smaller. Women used the forest consultation services less frequent than men. Women’s goals of owning forest were also different from men’s, since over a third of women used their forest for recreational purposes. Women were more passive forest owners than men. This can be partly explained by the large amount of women using their forest for recreational purposes. Women could be encouraged to be more active through a women’s own network. These kinds of networks have been put into practice for example in the USA.

The optimal harvesting for a set of even-aged Dahurian Larch (Larix gmelinii) stands located in Aershan area of the northeast of Inner Mongolia, China, are studied. The effects of catastrophic pest outbreaks (i.e. Siberian moth) on the optimal harvesting plan are also studied, and the comparison on these two cases, namely deterministic and stochastic, are analyzed. The simulation is based on an individual-tree diameter growth model, an individual-tree height model, and model for the tree mortality for the coming 5-year period. Combined with the simulation system, the optimization model modified from Hyytiäinen et al. (2005) is able to find the number of thinnings, intensity of thinning, type of thinning, subject to given rotation lengths. In even-aged management, the objective variable is the bare land value with 3.5% discount rate. In addition, a scenario approach is applied when simulating the effects of catastrophes, i.e., pest outbreaks. Stochasticity here is represented by a set of scenarios. The timing of an insect outbreak is random. In order to know the frequency of insect outbreak, an exponential model is applied. The numerical results indicate that the probability that an outbreak at epidemic level will occur within an interval of 5 years is about 0.39. Within a 10-year interval the probability is about 0.63. It is nearly certain that an outbreak at epidemic level occurs within 45 years. The optimal solutions are presented separately for deterministic and stochastic cases. For the deterministic case, the results indicate that high bare land values were associated with stands of high basal area, tree diameters and height. Typically, the higher the mean annual increment and the site quality, the higher the bare land value. Meanwhile, the results show that the optimal rotation may vary considerably (40-58 yrs) at 3.5% interest rate depending on the initial stand state. In the stochastic case, considering the effect of catastrophe of pest outbreak, numerical results show that the optimum roation is shortened and the mean values of bare land value are about 14.8% to 25.6% lower compared with the deterministic case.

In Finland there are over 18 million hectares of forest land which is suitable for wood production. Of this amount the proportion of private forests is over 60 %. The private forests have also an important role in the Finnish forest industry. For example, in 2008, Finnish forest industry used more than 66 million cubic meters of wood, of which 62 % came from the private forests. The change in the forest ownership structure in Finland began in the 1960s and it will continue in the future as well. As a result, nowadays the average age of the Finnish forest owner has risen to 60 years, the proportion of farmer forest owners has decreased, the proportion of urban forest owners has increased and the objectives of the forest owners have changed. Among other things, these changes have raised a threat that wood supply would possibly decrease in the future. In addition, the availability of imported wood is under a threat in the near future, because Finland’s main importing country Russia is planning significant increases in wood export duties in 2011. Then it would be more challenging to replace the possibly diminishing timber supply from private forests with imported wood. These threats created a need for this study to examine the regional utilization rates of the private forests and the Finnish forest owners’ timber sales behavior and the factors influencing it. The results of the forest utilization rates showed that the forests have already been in full use in many provinces. However, depending on the timber assortment it would have been possible to increase the loggings in 4 – 9 provinces during 2004 – 2008. In that sense, if the aim is to increase the loggings in the future, then at least in principle, it would be possible. The results of the Finnish forest owners’ timber supply and the factors affecting it showed that the most significant factors were the combinations of the forest plans, the proportion of protected areas, the prices of timber assortments, the proportion of agriculture and forestry entrepreneurs and the proportion of urban forest owners. All these factors had a positive impact on wood supply except the proportion of protected areas.

Tutkimuksen tarkoituksena on tuoda esille REIT-metsäkiinteistörahastot ja niiden mahdolliset vaikutukset Suomen metsätalouteen. Tutkimusmenetelmänä on tulevaisuuden tutkimisessa käytettävä Delfoi-menetelmä, joka perustuu asiantuntijoilta saadun argumentaation käsittelyyn. Tämän tutkimuksen asiantuntijapaneeli käsittää 16 metsäalan asiantuntijaa, jotka työskentelevät eri instituutioissa. Asiantuntijat valittiin tarkan harkinnan perusteella ja heille lähetettiin sähköpostitse kysymys, johon he saivat vastata vapaasti. Sähköpostikysely oli kaksivaiheinen, Delfoi-menetelmän periaatteen mukaisesti. Asiantuntijoilta saadun aineiston avulla tutkittiin, skenaarioita hyväksikäyttäen, miten REITmetsäkiinteistörahasto voisi vaikuttaa Suomen metsätalouteen ja sen tämän hetkisiin ongelmiin. Ongelmiksi on luokiteltu tässä tutkimuksessa mm. Suomen yksityismetsien pirstoutuminen, epäsuoran sijoitusinstrumentin puute metsätaloudessa ja yksityismetsänomistajien metsänhoidon tehottomuus. Lisäksi asiantuntijoilta haluttiin argumentaatioita REIT-metsäkiinteistörahastojen olemassaolon mahdollisuuksiin Suomessa. Saadut vastaukset lajiteltiin aiheittain, kirjoitettiin tulevaisuusskenaarioiksi ja erilliseksi argumentaation tarkasteluksi. Suomessa ei ole mahdollista perustaa yhtiötasolla verovapaata REIT-metsäkiinteistörahastoa. Suomen kiinteistörahastolainsäädäntö ja osakeyhtiölaki pitävät huolta siitä, että yhtiömuotoinen metsänomistus ei kannata Suomessa. Epäsuora metsänomistus ei ole Suomessa mahdollista ja metsää voi omistaa vain hankkimalla metsäkiinteistön. REIT-metsäkiinteistörahasto mahdollistaisi metsänomistamisen yhtiön kautta. Se tarkoittaisi, että osakkeiden kautta omistettu metsä ei vaatisi osakkeenomistajilta metsänhoidollisia ja hallinnollisia toimenpiteitä. Tämän tutkimuksen tulokset viittaavatkin siihen, että Suomeen tarvittaisiin nopeasti REIT-metsäkiinteistörahaston salliva lainsäädäntö, jotta voitaisiin hyötyä REIT:n mahdollisesti tuomista uudistuksista. Tulokset viittaavat myös siihen, että nykyiset metsien yhteisomistusmuodot ovat riittämättömiä kattamaan uuden metsänomistajasukupolven tarpeet, ja sijoitusluontoiselle metsänomistukselle olisi kysyntää. Asiantuntijoiden mielipiteet osoittavat, että REIT-metsäkiinteitärahastolle olisi hyvät edellytykset toimia Suomessa. Niiden kautta voisi metsien arvostus nousta uudelle tasolle. Perusteena arvonnousulle olisi metsäomaisuuden saattaminen pörssiin ja sitä kautta metsänomistajaksi voisi tulla lähes kuka tahansa.

According to the Statistics Finland the Finnish furniture industry’s value of production sold in 2012 was around 762 million Euros, of which wooden furniture accounted for about 72 %. In 2012 approximately 85 % of the production was sold in the domestic market. Therefore, Finnish furniture industry has a great interest to understand for which kinds of product attributes the Finnish consumers are willing to pay. This study examines the Finnish consumers’ willingness to pay for different quality characteristics of wooden furniture from the consumers’ demographical background point of view. The aim is to highlight potential customer segments in the wooden furniture market in Finland. The survey data was collected for a joint study project of the Finnish Forest Research Institute and Pellervo Society during the summer 2004 in Eastern Finland from two different sources: home retail centres selling building materials and the annual home construction fair. The survey data consists of 147 form interviews of Finnish consumers of 18-75 years of age. In the survey the respondents were asked to express the importance of different attributes of wooden furniture in relation to the price of product in the scale 1-7. The interviews were carried out using the Exit-technique, which means that the survey data is being collected in the vicinity of the examined object so that the interviewers may clarify the questions and present concrete examples related to them if necessary. Statistical analysis of the data was performed using the SPSS software. Cross-tabulation and mean were used as statistical methods in the research. According to the results the most important attributes for the consumers in relation to the price of wooden furniture were appearance, use properties and technical quality. The least important attributes were brand name and image of the producer. Environmental friendliness was the fourth least important attribute for the consumers of the 12 attributes, and somewhat surprisingly, older generations were more willing to pay for it than the younger generations. The domestic origin of the wooden furniture was very important attribute for consumers of over 40 years of age. The results indicate that the consumers are distributed to different segments depending on their demographic background factors, which should be taken into account in the manufacturing process as well as in the marketing and sale actions of wooden furniture.

Forest industries of many forest-rich Nordic nations have traditionally been highly export oriented, where domestic demand is not sufficient to guarantee the existing production capacity. Under these circumstances the exchange rate, the value of the domestic currency relative to that of the trading partners, becomes then one of the most important macroeconomic considerations. In the short run it determines the profitability and competitiveness, and thus each firm’s survival. In the long run, firms may e.g. hedge against unfavourable currency fluctuations or anticipate future currency developments and stipulate them in their long-term sales contracts. Firms also have the possibility to act strategically by absorbing some or all of a currency change in export prices and this way affecting traded quantities. Although theoretical contributions to the literature fail to conclusively validate this hypothesis and the results of empirical estimations are widely mixed, studies concerning forest products trade have often found evidence of exchange rate effects on traded quantities. Previous studies concerning Finnish forest product exports have reported the use of exchange rate changes to alter prices in the buyer’s currency, especially as a consequence of deliberate currency fixing. For example devaluations, often used to downsize the effect of a rising domestic cost level, have increased the price competitiveness and export quantities of Finnish forest industry firms. Realization of the third phase of the European Economic and Monetary Union (EMU) on the beginning of 1999 merged the participating countries’ currencies into the euro at an irrevocable fixed rate, which then eliminated the possibility to independently realign the currency value. Moreover, exchange rate effects, and hence exchange rate risks, have exclusively been vanished from intra-EMU trade. This has meant the opening of a whole new market for many small open economies. At the same time, a change in the business environment could have caused severe adaptation problems to some Finnish forest industry firms. The aim of the present study is to examine the effects of Finland’s EMU participation on its sawnwood exports to the main export markets in United Kingdom and Germany. As Finland’s most important competitor Sweden decided to remain outside the monetary union, it was chosen to serve as a reference point for the possible effects the loss of an independent monetary policy has had. Weakening of the krone against the euro for the past years has brought additional interest on the topic. The emphasis is on studying relative prices and its effects on traded quantities through the long-run exchange rate pass-through phenomenon for the period 1995- 2008. The empirical estimation is carried out by applying Johansen’s cointegration method for the separate partial equilibrium model systems, for each bilateral trade of Finland and Sweden to both destination markets. The results give evidence that Finnish sawnwood exports have been affected to a great extent by currency movements. Depreciations of the euro have boosted export demand, whereas appreciations have, in turn, dampened imports from Finland. The pricing strategy exploited by Swedish exporters has been somewhat opposite to Finnish exporters’. This has meant both a more stable price for Swedish sawnwood importers and export demand faced by Swedish exporters. These findings further suggest only minor negative effects of Swedish krone depreciations on Finnish sawnwood firms’ price competitiveness. Nevertheless, Swedish exporters have been able to achieve higher profits, which seems to have been an important consideration behind some recent shifts of production from Finland to Sweden.

The curse of natural resources is broadly addressed in the literature on economic development and growth. It is generally believed that resource abundant economies tend to grow more slowly than economies of low resource endowment. In the former Soviet countries, resource dependence determines country economic strategy in many aspects. Due to old Soviet legacies, the countries struggle to build a truly civil society, with a developed industrial production sector. This paper investigates the existence of the resource curse in the post-Soviet states, analyzing the main economic, social, and political issues and problems emerging from high resource endowment. The research objective of the current study is to examine the economic dependence of natural resource exports in the post-Soviet states, as well as to test the effect of high resource endowment on economic growth. In this paper, a review of resource curse literature and further empirical panel analysis based on chosen econometric model and methods (OLS, TSLS) are carried out. Natural resources in the model were divided into two main categories, i.e. point-source (oil, gas, minerals, metals) and diffuse (agriculture, forest) resources. The former Soviet economies that are highly dependent on natural resources tend to develop rather slowly due to inefficient resource management, rent-seeking behavior, high level of corruption, lack of political freedom, and poor performance in non-resource sector. However, the main finding from the empirical testing indicates a highly significant positive effect of resource exports on economic growth, for both point-source and diffuse resources. Upon further analysis, it is concluded that agriculture exports in GDP provide the highest positive effect on economic growth. Institutional quality provides little impact on economic growth, although theoretically its importance is detected. Thus, in the post-Soviet countries high resource abundance tend to have a positive direct association with economic growth; nevertheless, economic growth in this case does not lead to country development.

The profit made through clear-cutting can be estimated easily, when keeping one s eye on the stumpage-price. However, problems arise if the consumer is to estimate the stumpage-price, making their own calculations with the interest-rate. Thus, the time used in-waiting becomes the reason for the price, whilst sales during the high-season no longer guarantee the maximum income for clear-cutting. Through this research, aim is to find out what are the financial profits and losses made by the forest owner through the clear-cutting. Calculations have been made on the assumption that the land-owner is able to transfer his or her forestry market-gains on to the Stora Enso s Tähtitili , which offers 5% interest to it s customers. This research also recognises what political and economical factors have affected stumpage prices during the research s time window, between the years 2006 and 2010. This particular research was made by analyzing the trade completed between a customer and Stora Enso, in the region of Savonian Carelia. In this analysis a proposal was put forward by Stora Enso, whereby the forest owner would put his money from the ongoing trade to their Tähtitili . Through this it became possible to find out, how much profit Tähtitili had returned. There was also another option. It was that the forest owner wouldn t have sold his forest for clear-cutting, but would have waited on the stock-market stumpage-price to offer it s best price. This way, it was to be seen what was the value of the forest whilst it still stood. By comparing these two options, it would be pos-sible to say, which of these two alternatives was more profitable. According to the findings of this research, the land-owner should not hesitate in accepting clear-cutting, on the basis that the forest is ready and capable of re-rowth. However, if the forest is not ready for regeneration, then it s not worth for regeneration. This type-of-forest holds more value whilst standing. Should the land-owner choose to follow the stumpage-price if their forest is clearly clear-cuttable, then they are at a financial loss.