The contingent-claims-based real options theory is used to value timber harvesting options in Ontario, Canada. Monthly prices from 1981 to 2006 are used for analysis, and different statistical tests, including structural breaks, are used to test the stationarity of prices. The tests show the...

We develop and use an enhanced parity bounds model (EPBM) to examine the discrepancy between the stumpage price administratively determined under Ontario’s current stumpage pricing system and the market value of stumpage covering from June, 1995 to January, 2007. The results show that in the...