Long-Run Timber Supply and the Economics of Timber Production

Authors: Yin, Runsheng¹; Newman, David H.¹

Source: Forest Science, Volume 43, Number 1, 1 February 1997 , pp. 113-120(8)

Publisher: Society of American Foresters

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Abstract:

The analysis of long-run timber supply is hampered by the lack of a well-defined profit function. Such a function provides the foundation for deriving a theoretically consistent supply equation. Some recent studies have attempted to obtain a timber supply equation by manipulating the stand-level Faustmann model. As a result of inappropriate approaches and assumptions, their conclusions may be false. In this article, we build on the Faustmann-Smith-Samuelson model first developed by Comolli (1981) to examine aggregate timber production. We show this model to have the desired properties of a profit function that allows us to test various issues. It is then found that the general beliefs of negatively sloped per-land-unit supply curves and positively sloped aggregate supply curve are robust. Finally, we present several applications and implications of our modeling approach. For. Sci 43(1):113-120.

Keywords: Faustmann; profit function; production function

Document Type: Journal article

Affiliations: 1: Associate Professor, Warnell School of Forest Resources, University of Georgia, Athens, GA 30602-2152

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