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About: Faustmann's formula     Goto   Sponge   NotDistinct   Permalink

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Type: yago:Abstraction100002137yago:Communication100033020yago:Message106598915yago:Proposition106750804yago:Statement106722453yago:Theorem106752293yago:WikicatEconomicsTheorems New Facet based on Instances of this Class

Faustmann's formula, or the Faustmann model, gives the present value of the income stream for forest rotation. It was derived by the German forester in 1849. The rotation problem, deciding when to cut down the forest, means solving the problem of maximising Faustmann's formula and this was solved by Bertil Ohlin in 1921 to become the Faustmann-Ohlin theorem, although other German foresters were aware of the correct solution in 1860. The Faustmann formula is as follows: From this formula two theorems are interpreted: