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What is the cost of low participation in French Timber auctions?

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  • Raphaële PRÉGET
  • Patrick WAELBROECK

Abstract

How much is the timber from public forests worth? How can the Public Forest Service define a fair market price for standing timber lots? What is the cost of low participation in French timber auctions? To estimate the value of a timber lot we adopt the transaction-evidence appraisal approach using data from timber auctions in Lorraine (Eastern France) accounting for the facts that: (i) the seller’s reserve prices are secret, (ii) there remain many unsold lots, and (iii) the number of bidders varies from one auction to another. Taking into account the endogenous participation in our hedonic price equation for the highest bid, we estimate that, compared to lots that receive two bids, the highest bid is 22% lower when there is only one bid and 37% higher when there are three or more bids.

Suggested Citation

  • Raphaële PRÉGET & Patrick WAELBROECK, 2010. "What is the cost of low participation in French Timber auctions?," Working Papers 10-08, LAMETA, Universtiy of Montpellier, revised Sep 2010.
  • Handle: RePEc:lam:wpaper:10-08
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    1. Kurt Niquidet & G. Cornelis van Kooten, 2004. "Are Log Markets Competitive? Empirical Evidence and Implications for Canada-U.S. Trade in Softwood Lumber," Working Papers 2004-04, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
    2. Martijn van Hasselt, 2005. "Bayesian Sampling Algorithms for the Sample Selection and Two-Part Models," Computing in Economics and Finance 2005 241, Society for Computational Economics.
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