Actually, one can see the lack of such a formula in William Petty's A
Treatise of Taxes and Contributions 1662 [Hull edition, p. 45] where
he tries to relate the value (fee simple) of the land to its return
[usufruct]. He arrives at the going rate through a contorted way
involving the expected lifespan of three generations.
Usually the discounted value formula is attributed to Martin Faustmann
(1849) "Berechnung des Wertes welchen Waldboden, sowie noch nicht
haubare Holzbestände für die Waldwirtschaft besitzen", Allgemeine
Forst- und Jagd-Zeitung 25:441-55. English translation by W. Linnard
in M. Gane (ed.), 1968, Martin Faustmann and the Evolution of
Discounted Cash Flow. Oxford: Commonwealth Forestry Institute,
Institute Paper no. 42. Since, however, Mason Gaffney is on the list,
I demur.
On "the early history of financial economics, 1478-1776" see Geoffrey
Poitras' indispensable book  [Elgar, 2000].

On Wed, Jan 23, 2013 at 9:05 PM, Robert Murphy <[log in to unmask]> wrote:
> Dear List,
>
> The Wikipedia entry on Discounted Cash Flow (DCF) analysis of equity prices
> makes it sound as if Irving Fisher pioneered the technique in 1930:
>
> "Following the stock market crash of 1929, discounted cash flow analysis
> gained popularity as a valuation method for stocks. Irving Fisher in his
> 1930 book "The Theory of Interest" and John Burr Williams's 1938 text 'The
> Theory of Investment Value' first formally expressed the DCF method in
> modern economic terms."
> (http://en.wikipedia.org/wiki/Discounted_cash_flow)
>
> Yet surely accountants were able to value bonds using (what we would now
> call) present-value discounting centuries before this? And even less obvious
> assets (farmland, apartment buildings?) that would throw off a long stream
> of net income?
>
> Can anyone help me with the history of these techniques?
>
> Thanks,
> Bob Murphy