IDEAS home Printed from
MyIDEAS: Login to save this article or follow this journal

The Dynamic Behavior of Efficient Timber Prices

  • Bruce McGough
  • Andrew J. Plantinga
  • Bill Provencher

A simple theoreticalmodel of a tim- consist ing of Faustmann rotations evalubermarket finds that there exists a rational expecta- ated at the mean of the price process. tions equilibrium in which prices evolve according The central question addressed in this to a stationary A R (1) process.Simulations analyz e study is: what is the appropriate model of a model with a more general representation of tim- timber prices? This is an important quesber stock dynamics. Implications for the optimal tion given the prescriptive nature of the harvesting literature are: 1) market efficiency pro- timber harvesting literature3 vides little justification for random walk prices; 2) and evidence unit root tests, used in previous studies to analyz e that the form of the price process strongly the informational efficiency of timber markets, do influences the performance of a reservanot distinguish between efficient and inefficient tion price rule relative to the Faustmann markets; and 3) failure to recognize asymmetric rotation (Haight and Holmes 1991; Plandisturbances in time-series analyses of historical tinga 1998). Nonetheless, most authors aptimber prices can lead to sub-optimal harvesting pear to select the form of the price process rules.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: A subscription is required to access pdf files. Pay per article is available.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by University of Wisconsin Press in its journal Land Economics.

Volume (Year): 80 (2004)
Issue (Month): 1 ()
Pages: 95-108

in new window

Handle: RePEc:uwp:landec:v:80:y:2004:i:1:p:95-108
Contact details of provider: Web page:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. repec:cup:cbooks:9780521326162 is not listed on IDEAS
  2. Heal, G., 1990. "The Optimal Use Of Exhaustible Resources," Papers fb-_90-10, Columbia - Graduate School of Business.
  3. Albers, Heidi J., 1996. "Modeling Ecological Constraints on Tropical Forest Management: Spatial Interdependence, Irreversibility, and Uncertainty," Journal of Environmental Economics and Management, Elsevier, vol. 30(1), pages 73-94, January.
  4. Deaton, Angus & Laroque, Guy, 1992. "On the Behaviour of Commodity Prices," Review of Economic Studies, Wiley Blackwell, vol. 59(1), pages 1-23, January.
  5. Jean-Daniel Saphores & Lynda Khalaf & Denis Pelletier, 2002. "On Jumps and ARCH Effects in Natural Resource Prices: An Application to Pacific Northwest Stumpage Prices," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(2), pages 387-400.
  6. Berck, Peter, 1981. "Optimal management of renewable resources with growing demand and stock externalities," Journal of Environmental Economics and Management, Elsevier, vol. 8(2), pages 105-117, June.
  7. Pindyck, Robert S, 1984. "Uncertainty in the Theory of Renewable Resource Markets," Review of Economic Studies, Wiley Blackwell, vol. 51(2), pages 289-303, April.
  8. Deaton, Angus & Laroque, Guy, 1996. "Competitive Storage and Commodity Price Dynamics," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 896-923, October.
  9. Clarke, Harry R. & Reed, William J., 1989. "The tree-cutting problem in a stochastic environment : The case of age-dependent growth," Journal of Economic Dynamics and Control, Elsevier, vol. 13(4), pages 569-595, October.
  10. LeRoy, Stephen F, 1989. "Efficient Capital Markets and Martingales," Journal of Economic Literature, American Economic Association, vol. 27(4), pages 1583-1621, December.
  11. Roger E. A. Farmer, 1999. "Macroeconomics of Self-fulfilling Prophecies, 2nd Edition," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262062038, June.
  12. Reed, William J., 1993. "The decision to conserve or harvest old-growth forest," Ecological Economics, Elsevier, vol. 8(1), pages 45-69, August.
  13. Thomas A. Thomson, 1992. "Optimal Forest Rotation When Stumpage Prices Follow a Diffusion Process," Land Economics, University of Wisconsin Press, vol. 68(3), pages 329-342.
  14. Fama, Eugene F, 1970. "Efficient Capital Markets: A Review of Theory and Empirical Work," Journal of Finance, American Finance Association, vol. 25(2), pages 383-417, May.
  15. Fama, Eugene F, 1976. "Efficient Capital Markets: Reply," Journal of Finance, American Finance Association, vol. 31(1), pages 143-45, March.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:uwp:landec:v:80:y:2004:i:1:p:95-108. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.