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Effects of Timber Prices, Ownership Objectives, and Owner Characteristics on Timber Supply

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In this article, we examine factors affecting nonindustrial private timber supply using a consistent estimation method for a limited dependent variable model. The survey data, collected in 1999 from 3,051 Finnish forest owners, includes information on objectives for ownership as well as annual harvest volumes between 1994 and 1998. Ownership objectives are identified using principal component analysis, and five forest ownership objective groups are generated using K-means clustering: multiobjective owners, investors, self-employed owners, recreationists, and indifferent owners. Along with stumpage price, reforestation costs and forest and owner characteristics, including the above objective groups, are used as explanatory variables in estimating the supply equation. A consistent estimation method allowing for heteroscedasticity and non-normality is used. Statistically significant elasticity of the unconditional mean harvest with respect to timber price is 1.3. Recreationists and indifferent forest owners, ceteris paribus, harvest about 2 m3/ha/year less than multiobjective owners and self-employed owners, whereas investors and indifferent owners are more price-responsive than the other groups.
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Keywords: harvesting decisions; inverse hyperbolic sine Tobit model; landowner objectives; nonindustrial private forestry; small-scale forestry

Document Type: Research Article

Publication date: 2009-12-01

More about this publication?
  • 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.
    Forest Science is published bimonthly in February, April, June, August, October, and December.

    2016 Impact Factor: 1.782 (Rank 17/64 in forestry)

    Average time from submission to first decision: 62.5 days*
    June 1, 2016 to Feb. 28, 2017

    Also published by SAF:
    Journal of Forestry
    Other SAF Publications
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