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Testing Timber Market Linkages with a STAR Model with Housing Start-Controlled Transitions

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  • Hood, Harrison B.
  • Dorfman, Jeffrey H.

Abstract

Market integration has been widely studied in the past to gain a better understanding of how different markets for the same good interact with one another. Traditional cointegration tests have been used to perform these analyses; however, these tests can only reveal the presence of stable or average long-term relationships. To evaluate market dynamics over time, we modify a time-varying smooth transition autoregressive (TV-STAR) model to examine pine stumpage markets in the U.S. South. The proposed model incorporates an economic indicator and allows us to evaluate market integration as it changes throughout a specified time period. The potential significance of this work is twofold. First, market integration can be observed as a function of an economic indicator, and secondly, the proposed model will allow us to draw inference about market integration at specific time points.

Suggested Citation

  • Hood, Harrison B. & Dorfman, Jeffrey H., 2014. "Testing Timber Market Linkages with a STAR Model with Housing Start-Controlled Transitions," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 169055, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea14:169055
    DOI: 10.22004/ag.econ.169055
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