Testing using variable discount rates in the economic analysis of even-aged tree crops

摘要

The use of constant capital costs in the estimation of even-aged tree crops (horticultural or forest) results in a wide disparity between market prices and the economic yields at different times during the age of the crop. The use of variable discount rates allows a more accurate estimate of economic value and price. A method is outlined for applying variable discount rates, illustrated using data from 15 pear farms in Italy, of which 12 are in production and 3 are still establishing and planting orchards. Capital costs and outlays are tabulated using the method over a 30-year period, which includes replacement costs.