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Modeling Forest Trade in Logs and Lumber: Qualitative and Quantitative Analysis

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  • G. Cornelis van Kooten

Abstract

This paper deals with forest trade modelling from a theoretical, analytic and empirical perspective. An integrated dynamic log-lumber trade model is developed and then used to examine two trade issues, namely, a reduction of Russian taxes on log exports and removal of the taxes on Canadian lumber destined for the United States. To demonstrate the dynamic aspect of the model, both sets of taxes are lowered over a period of time. The trade model consists of five Canadian regions, three U.S. regions, New Zealand, Australia, Chile, Rest of Latin America, Russia, Sweden, Finland, Rest of Europe, Japan, China, Rest of Asia, and Rest of the World – a total of 20 regions. It concerns only coniferous logs and softwood lumber, ignoring hardwoods. The model is also calibrated on 2010 observed bi-lateral flows of logs and lumber using positive mathematical programming. The forest trade model is written using an Excel-GAMS interface, with input data retrieved by GAMS from Excel and GAMS output written to Excel, where final calculations are made.

Suggested Citation

  • G. Cornelis van Kooten, 2013. "Modeling Forest Trade in Logs and Lumber: Qualitative and Quantitative Analysis," Working Papers 2013-04, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
    • Handle: RePEc:rep:wpaper:2013-04
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    References listed on IDEAS

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    1. Anthony Mogus & Brad Stennes & G. Cornelis van Kooten, 2005. "Canada-US Softwood Lumber Trade Revisited: Examining the Role of Substitution Bias in the Context of a Spatial Price Equilibrium Framework," Working Papers 2005-08, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
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    9. G. C. van Kooten & Henk Folmer, 2004. "Land and Forest Economics," Books, Edward Elgar Publishing, number 3466.
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    Cited by:

    1. van Kooten, G. Cornelis, 2014. "Benefits and costs of impeding free trade: Revisiting British Columbia's restrictions on log exports," Journal of Forest Economics, Elsevier, vol. 20(4), pages 333-347.
    2. Craig Johnston & G. Cornelis van Kooten, 2014. "Modelling Bi-lateral Forest Product Trade Flows: Experiencing Vertical and Horizontal Chain Optimization," Working Papers 2014-04, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.

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    More about this item

    Keywords

    log-lumber trade; spatial price equilibrium model; mathematical programming;
    All these keywords.

    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q27 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Issues in International Trade
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices

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