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Estimation of "Small Area" Multipliers for the Wood Processing Sector--an Econometric Approach

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The primary objective of the study was to develop estimates of multipliers which could be used to gauge the effect on local employment and income of changing levels of National Forest timber harvests in Northern California. The analysis focused on individual counties in the U.S. Forest Service's Northern California Planning Area. Dependency indicators were developed for 19 counties to show the relative importance of the lumber and wood products sector to each local economy. Differential personal income multipliers were estimated using econometric models for 15 of these counties which showed significant dependence on wood processing. These multipliers were "static" in the sense that they represented the total impact of a change in output of the timber industry. Estimates of multipliers were also obtained for two groups of counties using a dynamic model. These estimates permitted an assessment of the degree to which the multiplier would be felt in the first year of change in timber output. In addition to the empirical analysis, close attention was given to the theoretical basis for multiplier (impact) analysis. A comparison was made of the advantages and nature of econometric estimation, economic base (export base) analysis and input-output models as techniques for estimating impacts for "small area" economies such as counties or other subregions. Forest Sci. 25:7-20.

Keywords: Employment multipliers; economic base analysis; export base analysis; income multipliers; input-output models

Document Type: Journal Article

Affiliations: Professor of Forest Economics, Department of Forestry, University of California, Berkeley, CA 94720

Publication date: March 1, 1979

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  • Forest Science is a peer-reviewed journal publishing fundamental and applied research that explores all aspects of natural and social sciences as they apply to the function and management of the forested ecosystems of the world. Topics include silviculture, forest management, biometrics, economics, entomology & pathology, fire & fuels management, forest ecology, genetics & tree improvement, geospatial technologies, harvesting & utilization, landscape ecology, operations research, forest policy, physiology, recreation, social sciences, soils & hydrology, and wildlife management.
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