Nowadays, foresters cannot imagine timber valuation without the Faustmann formula. But, did Faustmann discover it really as the first one? Researcher from Natural Resources Institute in Finland found that not, as the valuation of forests was presented in the German territorial states almost 50 years before Faustmann.
After 167 years, the Faustmann formula remains unquestioned. The formula gives a solution to the optimal forest rotation age. Until present day, forest and natural resource economists have claimed that it was discovered in 1849 by Martin Faustmann, a German forester.
However, the paper of Esa-Jussi Viitala, from Natural Resource Institute in Finland, shows that the modern perspective to the valuation of forest was presented in German territorial states much earlier than has previously been thought.
The credit for Faustmann formula should be given to Johann Hossfeld, a competent forest mathematician, who in 1805 showed explicitly how forest value can be derived under both intermittent and sustained yield management. In other words, he discovered “Faustmann formula” much earlier than Faustmann, and for this remarkable accomplishment he deserves credit for being one of the true pioneers of modern forest economic thought. In order to be academically and morally honest, we should therefore call the formula for the forest valuation as “Hossfeld formula”.
Some foresters, especially interested in forest mensuration, can recall that Hossfeld also developed one of many formulas for calculating the cubic volume of logs.