Document Type

Article

Publication Date

10-28-2015

Abstract

This study estimates simultaneous demand and supply equations for the softwood sawtimber stumpage market in Louisiana using Johansen’s multivariate time-series analysis. The cointegration test in the presence of structural breaks is used to identify the rank of the long-run cointegrating space, and normalization restrictions are imposed to specify demand and supply models under the framework of the vector error correction model. Based on the annual data series from 1955 to 2013, the results reveal that long-run demand and supply coefficient estimates are statistically significant with expected signs. The pine beetle outbreaks in 1985–1986, the timber harvest reductions in the Pacific Northwest region in early 1990s, and the great financial crisis of 2007–2009 significantly influenced the sawtimber stumpage market in Louisiana. The estimated short-run error correction terms indicate that the speed of adjustment toward the long-run equilibrium in the sawtimber market is rather slow.

Publication Source (Journal or Book title)

Forest Science

First Page

904

Last Page

913

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