PROCESSOR: Updates to Cost and Revenue Escalators screen

[lbross]

1. The column headings are a bit disingenuous—harvest and costs in cycle 2 really are cycle 2 not 1 and should be labeled as such, so the three columns can be simply labeled as Cycle 2, Cycle 3 and Cycle 4. I would have a hard time explaining in the documentation why they are labeled as they are now.
2. The 1st row label could be better: the first should be “Treatment and Haul Costs” since that is what that multiplier will be applied to—"operating costs”—again, I don’t know where it came from, does not make a lot of sense.
3. Change the instruction to: “Enter or edit the escalator that will be applied as a multiplier to costs or revenue events in each of BioSum cycles 2, 3 and 4”
4. Change the note to read: “The default values presume an alternative rate of return (real, after inflation, discount rate) of 4 percent per year. See the BioSum Users’ Guide or Help Screen for guidance on how to calculate escalators for different discount rates and, if desired, for different assumptions about the rate at which particular classes of prices are expected to change over time relative to the general inflation rate.”
5. The “Current Cycle Length (Years)” is probably not a particularly necessary piece of information to provide given that the calculation of escalators is more involved than something easily calculated from this factoid. I am setting up a spreadsheet template for calculating these that will be more useful than this factoid. I am not opposed to keeping it, but it does stand out as a somewhat stray piece of information in the larger scheme of things.
6. It would be good to allow a few more decimal places to be entered—escalators will almost always be less than 1. A minimum of 3 decimal places would be good, though 4 would be better—two is a little imprecise, or will LOOK imprecise to users (even if the precision is not low relative to the rest of the parameters used in a BioSum analysis).
7. Accounting for discount rate is very important when costs and revenues occur at different times within a silvicultural sequence and when there is variation in the timing of economic events among silvicultural sequences. A default escalator value of 1 is NOT a good idea. For a ten year cycle, these are the values that should be default (based on a discount rate of 4 percent): Cycle 2

Cycle 3

Cycle 4

Costs

0.649581

0.438834

0.29646

Wood Prices

0.649581

0.438834

0.29646

Bioenergy Prices

0.649581

0.438834

0.29646

And for a five year cycle,

Cycle 2

Cycle 3

Cycle 4

Costs

0.790315

0.649581

0.533908

Wood Prices

0.790315

0.649581

0.533908

Bioenergy Prices

0.790315

0.649581

0.533908

[lbross]

Add button (above cycle 4 label) called 'Set Default Values' that will set the default escalators according to @jsfried matrix and the cycle length. The cycle length comes from the RxPackage table.

Note: We will postpone item #6 (more decimal places) until the next release. The existing scenario_cost_revenue_escalators schema only supports 2 decimal places. The defaults will be rounded to the nearest hundredth. 10 Year Cycle: Cycle 2: 0.65 Cycle 3: 0.44 Cycle 4: 0.30

5 Year Cycle: Cycle 2: 0.79 Cycle 3: 0.65 Cycle 4: 0.53

[jsfried]

All looks good.

[lbross]

Update SQL that queries for cycle length to select max cycle length so we always use the longest one for selecting default escalators. In practice they should all be the same but this isn't enforced.

[lbross]

From @jsfried: The only tweak I would suggest is to the note on the screen—a user reading it might think that the 1.0 values they see displayed (if they haven’t updated them) are a default (since that IS the do nothing option). How about replacing the first sentence: Note: Loading the Default Escalators (via the button) will replace whatever is currently entered with values that presume a 4 percent real annual discount rate.

And ending the note with: Use of the 1.0 values that are the default BEFORE selecting default escalators with the button or entering your own calculated values, is not recommended.