Econometric models of Finnish non-industrial private forest owners' timber supply and timber stock
Favada I. M. (2007). Econometric models of Finnish non-industrial private forest owners' timber supply and timber stock. https://doi.org/10.14214/df.46
Abstract
This dissertation examines the short- and long-run impacts of timber prices and other factors affecting NIPF owners' timber harvesting and timber stocking decisions. The utility-based Faustmann model provides testable hypotheses of the exogenous variables retained in the timber supply analysis. The timber stock function, derived from a two-period biomass harvesting model, is estimated using a two-step GMM estimator based on balanced panel data from 1983 to 1991. Timber supply functions are estimated using a Tobit model adjusted for heteroscedasticity and nonnormality of errors based on panel data from 1994 to 1998. Results show that if specification analysis of the Tobit model is ignored, inconsistency and biasedness can have a marked effect on parameter estimates. The empirical results show that owner's age is the single most important factor determining timber stock; timber price is the single most important factor in harvesting decision. The results of the timber supply estimations can be interpreted using utility-based Faustmann model of a forest owner who values a growing timber in situ.
Keywords
timber supply modeling approaches;
short-run and long-run price elasticities;
partial adjustment;
inverse hyperbolic sine Tobit model;
sawlog;
panel data
Published 9 October 2007
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Available at https://doi.org/10.14214/df.46 | Download PDF
Original articles
Kuuluvainen J., Favada, I. M., & Uusivuori, J. 2006. Empirical behaviour models on timber supply. In The theory and practice of environmental and resource economics. Essays in honour of Karl-Gustaf Löfgren, Edward Elgar, Cheltenham, UK. pp. 225-245.
http://envirovaluation.org/index.php/2006/05/22/edward_elgar_publishing_www_e_elgar_co_u
Favada, I.M., Kuuluvainen, J. & Uusivuori, J. 2007. Optimal timber stock in Finnish nonindustrial private forests. Forest Policy and Economics 9: 527-535.
https://doi.org/10.1016/j.forpol.2006.03.002
Favada, I.M., Kuuluvainen, J. & Uusivuori, J. 2007. Consistent estimation of long-run nonindustrial private forest owner timber supply using micro data. Canadian Journal of Forest Research (In press).
Favada, I.M., Karppinen, H., Kuuluvainen, J., Mikkola, J. & Stavness, C. The effects of prices, owner characteristics and ownership objectives on timber supply (Submitted manuscript).