Abstract
A comparison is established between the concept of shadow price in linear programming and welfare economics. The shadow price should be used to appraise public forestry investments. In some circumstances, private forestry projects may have to be appraised from society's standpoint requiring shadow pricing also. But if the same forestry projects are looked at by a private individual or a firm, the appraisals will use market prices instead. This last analysis is termed financial analysis and differs from the economic analysis which uses shadow prices and appraises the project from a societal point of view. An example of shadow pricing a forestry project is derived from a cost sharing program evaluation presently investigated in Massachusetts.
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