Harvest Choice and Timber Supply Models for Forest Forecasting
Timber supply has traditionally been modeled using aggregate data, whereas individual harvest choices have been shown to be sensitive to the vintage and condition of forest capital stocks. In this article, we build aggregate supply models for four roundwood products in a seven-state region of the US South directly from stand-level harvest choice models applied to detailed forest inventories. These models allow for a more precise accounting of the biological and economic underpinnings of supply and support forecasting of changes in forest inventories with a high degree of detail. Estimation results support use of the approach. The elasticities of softwood and hardwood sawtimber supply, 0.34 and 0.31, respectively, are consistent with the elasticities reported by previous studies. The elasticities of softwood and hardwood pulpwood supply (respectively, 0.062 and 0.025) are much lower than previous studies found for pulpwood supply, and cross-price elasticities indicate a dominant influence of sawtimber markets on pulpwood supply. Results generally indicate complementarity between sawtimber and pulpwood supply in the short run. This approach can provide a means of predicting the supply consequences of exogenous factors that could alter forest inventories, e.g., climate change and invasive species, and support regular updating of supply models as new inventory data are recorded.