How was value determined:

1. The regional value for forest lands raw materials was calculated by dividing the total appraised values for all standing tree auctions on public lands for all tree species by the number of acres for all auction stands on May 30, 2007 in the Michigan state forest unit closest to our policy region (TimberSource 2007).
2. We annualized the appraised values at a 7% discount rate, which is the rate required by the U.S. Office of Management and Budget for most governmental agencies doing cost/benefit analysis.
3. Then we assumed a 30-year re-harvest as a sustainable forest management practice, and added the future values to re-harvest the stand in 30,60, and 90 years in the future.

Value estimate limitations:

1. By using an average value over all tree species and stand locations, we did not take into account variations in value for different tree species, the difficulty of harvest, or sustainable forestry management requirements for individual auction stands.
2. This value assumes that there is no variation in price at the re-harvest periods 30, 60, and 90 years in the future.