The Impact of site value taxation on the optimal time to cut timber when borrowing and lending rates diverge

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The economic literature on forest taxation concludes that the timber cutting time is independent of changes in a site value tax, assuming such changes are fully capitalized into the market value of land. Adopting a continuous-time theoretical model that incorporates an imperfect capital market, it is demonstrated why empirical evidence might reject this hypothesis of "fiscal neutrality."

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© 1987 by the Society of American Foresters. Publisher's version of record: http://www.ingentaconnect.com/contentone/saf/fs/1987/00000033/00000003/art00015

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Forest Science