Annual use, economic life and residual value of cut-to-length harvesting machines

Raffaele Spinelli, Natascia Magagnotti and Gianni Picchi

Journal of Forest Economics, 2011, vol. 17, issue 4, 378-387

Abstract: Recognizing the absence of up-to-date empirical data on the economic life, the annual use and the residual value of dedicated cut-to-length (CTL) harvesting machinery, the authors gathered a large database of second-hand machine sale offers containing over 1000 records, coming from Europe and North America. The statistical analysis of these data pointed at an economic life in the vicinity of 18,000h for both harvesters and forwarders, which confirms previous assumptions. The average annual use for the machines in the database is 1424 and 1581h year−1, respectively for the harvesters and the forwarders. Nordic users achieve a higher annual use than central European users, and the difference is statistically significant. Nevertheless, the average annual use recorded for both groups falls below the levels commonly adopted in current estimates, which may therefore represent ideal reference figures rather than actual averages. Residual value is strongly related to machine age, and the authors calculated some simple functions for estimating it. The study points at a better retention of the original value, compared to the figures reported in previous literature. At 5 years of age the harvesters and forwarders in the study keep respectively 38% and 44% of the new value. The information contained in the study is crucial to machine rate calculation, which has often been based on rule-of-thumb assumptions, in the absence of empirical data.

Keywords: Machine rates; Cost; Harvesting; Machinery; CTL (search for similar items in EconPapers)
JEL-codes: C93 L24 L73 (search for similar items in EconPapers)
Date: 2011
References: View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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DOI: 10.1016/j.jfe.2011.03.003

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