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Identification of structural breaks in the forest product markets: how sensitive are to changes in the Nordic region?

Author

Listed:
  • Tahamina Khanam

    (University of Eastern Finland)

  • Abul Rahman

    (University of Eastern Finland)

  • Blas Mola-Yudego

    (University of Eastern Finland
    Swedish University of Agricultural Sciences)

  • Jouni Pykäläinen

    (University of Eastern Finland)

Abstract

Forests play a fundamental role in the global carbon cycle and can be managed to mitigate greenhouse gas emissions and conserve or sequester carbon. Global policy and environmental changes can affect regional consumption of forest products, as well as inter-regional trade of forest goods and services. This study analyzes global and regional change impacts on the production, consumption and trade of forest products in two Nordic countries, Finland and Sweden. Annual data on removal and trade (1964–2012) for roundwood and sawnwood is used to identify structural breaks based on Chow tests. According to the analysis, the time period is divided into two periods: t1 (1964–1980) and t2 (1981–2012). In the first period, breaks occurred in 1975 and 1976 in the Finnish model and no break is found in the Swedish model. In the second period, we identify breaks in 1991 and 1992 for the Finnish model and in 2004, 2005 and 2006 for the Swedish model. Although our findings have broad empirical support, we do not identify any specific incident as a direct cause of the changes in the consumption and trade patterns of the two types of wood in these countries. The models and analysis presented here can serve as methodological tools for policymakers to better understand the effects of structural changes in the production of forest goods and services in the Nordic region and globally.

Suggested Citation

  • Tahamina Khanam & Abul Rahman & Blas Mola-Yudego & Jouni Pykäläinen, 2017. "Identification of structural breaks in the forest product markets: how sensitive are to changes in the Nordic region?," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 22(3), pages 469-483, March.
    • Handle: RePEc:spr:masfgc:v:22:y:2017:i:3:d:10.1007_s11027-015-9681-9
    DOI: 10.1007/s11027-015-9681-9
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    References listed on IDEAS

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    1. Lundmark, Robert, 2010. "European trade in forest products and fuels," Journal of Forest Economics, Elsevier, vol. 16(3), pages 235-251, August.
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    3. Mola-Yudego, Blas & Pelkonen, Paavo, 2008. "The effects of policy incentives in the adoption of willow short rotation coppice for bioenergy in Sweden," Energy Policy, Elsevier, vol. 36(8), pages 3052-3058, August.
    4. Heij, Christiaan & de Boer, Paul & Franses, Philip Hans & Kloek, Teun & van Dijk, Herman K., 2004. "Econometric Methods with Applications in Business and Economics," OUP Catalogue, Oxford University Press, number 9780199268016.
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