. Effects of new export rules, a spotted owl plan, and recession on timber prices and shipments from the Douglas-fir region. Spotted owl; Lumber trade Northwest, Pacific; Douglas fir Prices. 800 600 400 200 ,^New supply New demand > 0 2 4 6 8 10 12 14 Billion board feet lumber tally Panel C Domestic log market 01 2345678 Billion board feet lumber tally Panel D Offshore log market - 800 ce o .o 600 co CO o o a CO co o Q 400 200 New \\ demand. New / supply/ 800 600 400 200 , 1 1 1 1 f If A »1 ' 1 i \ i \ i \ New; y supply/ a l / \ i I \ i / 1 i / # / $ / 9 / f / # / * / t / 1 / $ I r i j_ \ D
. Effects of new export rules, a spotted owl plan, and recession on timber prices and shipments from the Douglas-fir region. Spotted owl; Lumber trade Northwest, Pacific; Douglas fir Prices. 800 600 400 200 ,^New supply New demand > 0 2 4 6 8 10 12 14 Billion board feet lumber tally Panel C Domestic log market 01 2345678 Billion board feet lumber tally Panel D Offshore log market - 800 ce o .o 600 co CO o o a CO co o Q 400 200 New \\ demand. New / supply/ 800 600 400 200 , 1 1 1 1 f If A »1 ' 1 i \ i \ i \ New; y supply/ a l / \ i I \ i / 1 i / # / $ / 9 / f / # / * / t / 1 / $ I r i j_ \ Demand i —i—j— 0 2 4 6 8 10 12 14 16 Billion board feet, Scribner 0 1 2 3 4 5 6 7 Billion board feet, Scribner Figure 2—Four market sectors after a change in the domestic log supply. Framing the Problem: Policy-Driven Supply Reductions Onshore, lumber moving to the domestic market declines, with rising prices (panel A). These price increases excite a demand increase for logs by lumber producers, which is reflected in a rightward log-demand shift in panel C. Log sellers receive higher prices; whether their revenues increase depends on the slopes of the curves as volumes decline. The same applies to lumber producers. Reported impacts of recent policy changes have invariably been expressed in terms of volumes of timber cut or sold. Even for public lands where allowable sale quantities are set in advance, the amounts actually cut depend on market conditions. At least in the short term, other ownerships may provide offsetting supplies. Our model replicates these market characteristics as rightward-sloping supply curves (fig. 1, panel C), with higher prices inducing larger Statements about volume impact actually al- lude to shifts of supply curves, as in figure 2. A leftward shift of a supply curve along an other-than-horizontal demand curve causes their intersection to move by less than 3 Our equations have price elasticities of and for stumpage and log e
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