Joint production and substitution in timber supply: a panel data analysis

Torjus Bolkesjø, Joseph Buongiorno and Birger Solberg

Applied Economics, 2010, vol. 42, issue 6, 671-680

Abstract: Supply equations for sawlog and pulpwood were developed with a panel of data from 102 Norwegian municipalities, observed from 1980 to 2000. Static and dynamic models were estimated by cross-section, time-series andpanel data methods. A static model estimated by first differencing gavethe best overall results in terms of theoretical expectations, pattern ofresiduals, prediction accuracy and parsimony. The results showed thatsawlog supply responded positively to its own price (elasticity e = 0.91 ± 0.07) but negatively to the pulpwood price (e = -0.22 ± 0.06). The pulpwood supply responded positively to the price of both pulpwood (e = 0.53 ± 0.06) and sawlogs (e = 0.20 ± 0.07). Sawlog and pulpwood supply had a common elasticity of 2.04 (± 0.25) with respect to the growing stock, and of 0.30 (± 0.21) with respect to the interest rate. The supply elasticity of substitution of sawlog for pulpwood with respect to their relative price was 0.74 ± 0.04. Policies to raise the annual harvest, which is currently well below the annual growth, should focus on stimulating sawnwood production (thus increasing sawlog prices), because this would increase supply of both pulpwood and sawlogs. Instead, policies to stimulate pulpwood demand (thus increasing pulpwood prices), would give more pulpwood, but less sawlogs.

Date: 2010
References: View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/00036840701721216 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:applec:v:42:y:2010:i:6:p:671-680

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036840701721216

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().