Interregional Aspects of Timber Inventory Projections

Abstract

The overall goal of this study is to explore interregional aspects of modeling timber supply. Three separate papers are presented in this dissertation.

The first paper (Chapter 3) presents an econometric analysis of factors influencing demand and supply of pulpwood in Alabama. The softwood and hardwood pulpwood markets were modeled simultaneously as a partial equilibrium system, where equalities of supplies and demands determine prices. Estimation of the parameters was done using two-stage least squares. Price elasticities of supply were found to be similar to those previously reported for the U.S. South (Newman 1987, Carter 1992). The substitution role of sawtimber in hardwood pulpwood supply is consistent with findings for Sweden and the U.S. South (Brännlund et al. 1985, Newman 1987). Results indicate that softwood and hardwood demands are complementary and that a substitution relationship exists between Alabama and Mississippi pulpwood. Regression results can be used for short run predictions.

Four different specifications of a gravity model and a fixed gravity coefficient model were evaluated, and their capabilities to predict pulpwood trade were compared in Chapter 4. Root mean square error was used as a measure of models’ predictive performances. The gravity model estimated using non-linear least squares (NLS) with fixed error methods (FEM) and the fixed gravity coefficient model (FGCM) showed the best results, while results for the FGCM were second best and this method is much easier to use.

In Chapter 5, an interregional trading model for stumpage products was developed that recognizes the importance of demand centers (centers of forest products manufacturing activity) and inventory in forecasting future harvests and trade flows. A gravity model was constructed that considers the relative position of each region vis-á-vis all others as a producer of stumpage and as a consumer of stumpage products. The fixed gravity coefficient model was incorporated in a multi-region version of DPSupply (Teeter 1994, Zhou and Teeter 1996, Zhou 1998) referred to as the Interregional DPSupply System (IDPS). Projections for growth, harvest and trade in forest products were made for the thirteen state southern region through 2025. Aggregate trends in inventory are similar to those reported in the Southern Forest Resource Assessment. Inventory trends by product (pulpwood, sawtimber) and type (hardwood, softwood) differ by state and are used to illustrate the advantages of explicitly recognizing interregional trade in the projection system.