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Rajan Parajuli, Louisiana State University, rparaj1@lsu.edu (Presenter)
Sun J. Chang, Louisiana State University, xp2610@lsu.edu

 

Louisiana represents a large share of softwood sawtimber and pulpwood production in the southern USA. Considering 12 southern states as a single market, Newman (1987) developed regional supply and demand models of softwood sawtimber and pulpwood stumpage production in the US South. However, Yin et al. (2002) expounded that the entire southern market is not fully co-integrated so that there does not exist a single stumpage market for softwood timber across the southern states. There are a number of state-level softwood market studies in North Carolina (Daniels and Hyde, 1986), Texas (Carter, 1991), and Alabama (Polyakov et al., 2005); yet no particular study has been available on softwood stumpage market in Louisiana. Using the time-series data from 1960 to 2010, this study will develop supply and demand models of softwood sawtimber and pulpwood in the context of Louisiana. Further, under the framework of profit maximization,this study will identify the factors determining demand and supply for the Louisiana softwood market. The timber harvest and stumpage prices data will be obtained from Louisiana Department of Agriculture and Forestry. Two-stage least squares technique will be applied to overcome the simultaneous endogeneity problem, and different specification tests will be carried out to assess the consistency and heteroskadasticity of the least square estimates. The results of the study will provide useful guidelines to policymakers and forest product industries in Louisiana.