Open AccessSTOCHASTIC PRICE MODELS AND OPTIMAL TREE CUTTING: RESULTS FOR LOBLOLLY PINE
Author(s) -
Haight Robert G.,
Holmes Thomas P.
Publication year - 1991
Publication title -
natural resource modeling
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.28
H-Index - 32
eISSN - 1939-7445
pISSN - 0890-8575
DOI - 10.1111/j.1939-7445.1991.tb00255.x
Subject(s) - stumpage , autoregressive model , econometrics , series (stratigraphy) , economics , unit root , loblolly pine , mathematics , contrast (vision) , computer science , pinus <genus> , geology , agricultural economics , biology , paleontology , botany , artificial intelligence
An empirical investigation of stumpage price models and optimal harvest policies is conducted for loblolly pine plantations in the southeastern United States. The stationarity of monthly and quarterly series of sawtimber prices is analyzed using a unit root test. The statistical evidence supports stationary autoregressive models for the monthly series and for the quarterly series of opening month prices. In contrast, the evidence supports a non‐stationary random walk model for the quarterly series of average prices. This conflicting result is likely an artifact of price averaging. The properties of these series significantly affect the forms of optimal price‐dependent harvest rules and expected returns. Further, the results have implications for conclusions about market efficiency and the performance of a fixed rotation age.