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Dynamic impacts of rising lumber prices on housing-related prices

Author

Listed:
  • Ronald A. Babula

    (National Economy and History Branch, Economic Research Service, US Department of Agriculture (ERS|USDA))

  • Phil L. Colling

    (Marketing Economics Branch, ERS|USDA)

  • Gregory R. Gajewski

    (Specialty Agriculture Branch, ERS|USDA)

Abstract

A monthly vector autoregression model of lumber, lumber futures, construction materials, housing, and shelter prices was shocked with a 10% lumber price increase, and dynamic responses were examined. Futures and materials price increases were immediate and endured 1 and 3 years, respectively. Housing and shelter price increases required at least 9 months to begin, and endured for about 3 years. Effects on materials, housing, and shelter prices were less than one-for-one. Price effects from a 10% future price increase imposed on the model were more delayed, weaker, and less enduring than those generated by lumber price shocks. ©1994 by John Wiley & Sons, Inc.

Suggested Citation

  • Ronald A. Babula & Phil L. Colling & Gregory R. Gajewski, 1994. "Dynamic impacts of rising lumber prices on housing-related prices," Agribusiness, John Wiley & Sons, Ltd., vol. 10(5), pages 373-388.
    • Handle: RePEc:wly:agribz:v:10:y:1994:i:5:p:373-388
    DOI: 10.1002/1520-6297(199409/10)10:5<373::AID-AGR2720100503>3.0.CO;2-U
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    References listed on IDEAS

    as
    1. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    2. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
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    Cited by:

    1. Babula, Ronald A. & Bessler, David A. & Reeder, John & Somwaru, Agapi, 2004. "Modeling U.S. Soy-Based Markets with Directed Acyclic Graphs and Bernanke Structural VAR Methods: The Impacts of High Soy Meal and Soybean Prices," Journal of Food Distribution Research, Food Distribution Research Society, vol. 35(3), pages 1-24, November.
    2. Zhang, Nan & Mei, Bin & Li, Yanshu, 2023. "A review of the financial performance of lumber futures and some prospects," Forest Policy and Economics, Elsevier, vol. 157(C).
    3. Babula, Ronald A. & Bessler, David A. & Reeder, John & Somwaru, Agapi, 2004. "Modeling U.S. Soy-Based Markets with Directed Acyclic Graphs and Time Series Econometrics: Evaluating the U.S. Market Impacts of High Soy Meal Prices," Working Paper ID Series 15885, United States International Trade Commission, Office of Industries.

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