Are Log Markets Competitive? Empirical Evidence And Implications For Canada-U.S. Trade In Softwood Lumber
Under the U.S. Department of Commerce's 'changed circumstances' review, it is possible that the countervail duty on Canadian lumber can be lowered if administered stumpage prices are based on a transaction evidence appraisal - on actual auction data and regression analysis. The Province of British Columbia is implementing such a market-based approach to set stumpage fees, relying on timber auction data from the Small Business Forest Enterprise Program and OLS regression. We employ Program data to estimate a truncated regression model, comparing our estimates of stumpage fees with the OLS results. It turns out that the OLS approach is biased and likely results in overestimates of stumpage in some timber stands and underestimates in others. Further, we demonstrate that number of bidders has an important impact on bids.
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- Brannman, Lance Eric, 1996. "Potential Competition and Possible Collusion in Forest Service Timber Auctions," Economic Inquiry, Western Economic Association International, vol. 34(4), pages 730-45, October.
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- Steer, Henry B., 1938. "Stumpage Prices of Privately Owned Timber in the United States," Technical Bulletins 166176, United States Department of Agriculture, Economic Research Service.
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- James J. Heckman, 1976. "The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 475-492 National Bureau of Economic Research, Inc.
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