amount of an alternative investment with similar risk and
time horizon frameworks.
The operating (po) profitability rate and total (p)
profitability rate received by the dehesa landowner that
matter are those estimated at factor cost, which is to say,
after considering subsidies net of taxes. Under Haza’s
actual scenario, the operating and total profitability rates
at factor cost amount to 2.7% and 3.1%. Under Haza’s
ideal scenario, those rates are 2.0% and 2.8%, respectively
(Table 5). However, since the ideal scenario’s woodland
price is estimated by the capitalization of the steady-state
hypothetical owner’s total benefit at market prices (CImp),
the 2% operating profitability rate is biased due to the
discount rate that we apply.