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U.S. softwood lumber demand and supply estimation using cointegration in dynamic equations

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  • Song, Nianfu
  • Chang, Sun Joseph
  • Aguilar, Francisco X.
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    Abstract

    This research estimated dynamic supply and demand equations for the U.S. softwood lumber using two-stage least squares. Long-run and ECM equations were derived from the estimated coefficients. Empirical data included monthly observations from 1990 to late 2006. Stationarity of the residuals was explored using Augmented Dickey-Fuller statistics. Results suggest that demand and supply elasticities in both short and long-run are relatively small compared with past studies. The Canadian softwood lumber supply to the U.S. is more price elastic than the domestic softwood lumber supply. U.S. import tariffs have had limited impact on the amount of softwood lumber imported from Canada. Technological progress and end-of-year seasonal effects on softwood lumber demand and supply were significant over this period.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Forest Economics.

    Volume (Year): 17 (2011)
    Issue (Month): 1 (January)
    Pages: 19-33

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    Handle: RePEc:eee:foreco:v:17:y:2011:i:1:p:19-33

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    Related research

    Keywords: U.S. softwood lumber market Non-stationary time series Cointegration Elasticities;

    References

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    Cited by:
    1. González-Gómez, Manuel & Álvarez-Díaz, Marcos & Otero-Giráldez, María Soledad, 2013. "Estimating the long-run impact of forest fires on the eucalyptus timber supply in Galicia, Spain," Journal of Forest Economics, Elsevier, vol. 19(2), pages 149-161.
    2. Koch, Sebastian P. & Schwarzbauer, Peter & Stern, Tobias, 2013. "Monthly wood supply behavior of associated forest owners in Austria—Insights from the analysis of a micro-econometric panel," Journal of Forest Economics, Elsevier, vol. 19(3), pages 331-346.

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