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Regional Log Market Integration in New Zealand


  • Kurt Niquidet
  • Bruce Manley


In this paper the integration of log prices across four regions in New Zealand was assessed. A time series of prices for six Radiata Pine (Pinus radiata D. Don) log grades in each of the regions were tested for co-integration using Johansen’s method and Engle-Granger pair wise tests. Prices for export grades display significant integration across regions and generally follow the law of one price. However, markets for domestic grades tend to be regionally segregated. These results are most likely due to the high costs of transporting logs between regions. Future modelling will need to incorporate such transportation costs in order to adequately characterise log markets in the country.

Suggested Citation

  • Kurt Niquidet & Bruce Manley, 2008. "Regional Log Market Integration in New Zealand," Working Papers 2008-03, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
  • Handle: RePEc:rep:wpaper:2008-03

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    File Function: Final version, 2008
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    References listed on IDEAS

    1. Yin, Runsheng & Newman, David H. & Siry, Jacek, 2002. "Testing for market integration among southern pine regions," Journal of Forest Economics, Elsevier, vol. 8(2), pages 151-166.
    2. Christopher B. Barrett, 1996. "Market Analysis Methods: Are Our Enriched Toolkits Well Suited to Enlivened Markets?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(3), pages 825-829.
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    More about this item


    log market; co-integration; law of one price;

    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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