Because economic analysis of forest management decisions depends so critically on the choice of discount rate, the appropriate value of this parameter remains controversial. Recently several economists have suggested, in one form or another, that the discount rate depends on the duration of the investment. However, empirical evidence marshalled to support this position can be explained by a model
... [Show full abstract] of asset markets where future returns are uncertain. Consequently, adjusting the discount rate as a function of the duration of the investment may be inappropriate. Alternative analytical techniques are required for comparing timber investments with other assets.