The economic effects of the mountain pine beetle outbreak in British Columbia are simulated using a multi-region spatial price equilibrium model coupled with a stochastic dynamic updating procedure. The simulation captures expected changes in the B.C. timber supply, growth of plantation forests in the southern hemisphere and an escalating Russian log export tax. The results indicate lumber and log prices will rise in B.C., offsetting some of the economic loss to timber producers. However, on net producers in the B.C. forest industry will experience a decrease in economic surplus.
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Paper provided by University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group in its series Working Papers with number
2008-02.
Find related papers by JEL classification: C67 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Input-Output Models F14 - International Economics - - Trade - - - Country and Industry Studies of Trade F17 - International Economics - - Trade - - - Trade Forecasting and Simulation