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Welfare Implications Of Timberland Ownership Changes In The U.S. Timber Markets

Author

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  • Rahman, Mohammad Mahfuzur
  • Munn, Ian Alexander
  • Sun, Changyou

Abstract

n the last two decades, many forest product firms in the U.S. either divested their timberlands to timber investment management organizations (TIMOs) and conservation organizations or converted their corporate structures from C corporations to real estate investment trusts (REITs). All landowners sold smaller timberland tracts for nonforestry uses. Reduced timber supplies from conservation organizations and timberland loss to other nonforestry uses have consequences on producer and consumer surpluses in the U.S. timber markets. Equilibrium displacement model has been employed to evaluate the welfare changes in U.S. timber markets attributed to timberland ownership changes. Net reduction of timber supply contributed to the reduction of social surplus by $43 million in 2006. Compared to the $33 billion plus U.S. timber markets, this welfare reduction was small. Overall, this article explains the shifts of economic surpluses among producers and net surplus reduction for the society attributed to timberland ownership changes in the United States.

Suggested Citation

  • Rahman, Mohammad Mahfuzur & Munn, Ian Alexander & Sun, Changyou, 2016. "Welfare Implications Of Timberland Ownership Changes In The U.S. Timber Markets," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 4(3), pages 1-16, July.
    • Handle: RePEc:ags:ijfaec:244285
    DOI: 10.22004/ag.econ.244285
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    References listed on IDEAS

    as
    1. Buongiorno, Joseph, 1996. "Forest sector modeling: a synthesis of econometrics, mathematical programming, and system dynamics methods," International Journal of Forecasting, Elsevier, vol. 12(3), pages 329-343, September.
    2. David H. Newman & David N. Wear, 1993. "Production Economics of Private Forestry: A Comparison of Industrial and Nonindustrial Forest Owners," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(3), pages 674-684.
    3. Roy Boyd & Barbara J. Daniels, 1985. "Capital Gains Treatment of Timber Income: Incidence and Welfare Implications," Land Economics, University of Wisconsin Press, vol. 64(4), pages 354-362.
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