. Projections of the demand for national forest stumpage by region, 1980-2030. Forests and forestry Economic aspects United States; Forest products United States. Estimates of elasticity vary through time. The relationships in general become more elastic as technological improvements lower processing costs and industry shifts from less competi- tive regions to regions with greater competitive advantage. An increase in elasticity of stumpage supply from all sources other than the USDA Forest Service would also serve to increase the elasticity of the demand curve for National Forest stumpage, an
. Projections of the demand for national forest stumpage by region, 1980-2030. Forests and forestry Economic aspects United States; Forest products United States. Estimates of elasticity vary through time. The relationships in general become more elastic as technological improvements lower processing costs and industry shifts from less competi- tive regions to regions with greater competitive advantage. An increase in elasticity of stumpage supply from all sources other than the USDA Forest Service would also serve to increase the elasticity of the demand curve for National Forest stumpage, and, there- fore, reduce the sensitivity of regional stumpage price to changes in National Forest supply. Finally, changes in the relative prices of substitutes, comple- ments for wood products, and national income would change the elasticity of product demand, and hence the demand relationship for National Forest stumpage. The Regional Demand for National Forest Stumpage The regional demand for stumpage on the National Forests is the relation- ship between price in the regional stumpage market and the level of timber offerings on the National Forests. This relationship cannot be directly observed from market trans- actions since the National Forests contribute only a portion of the total quantity supplied in each region and it is total quantity that establishes regional prices. We can, however, deduce the relationship between price and National Forest timber offerings. Further, we can do this in a way that allows for simultaneous supply adjust- ments on other ownerships. The underlying economic model is a combination of the models of derived demand, excess demand (from the international trade literature), and the dominant firm (from oligopoly theory).3 Price. Quantity Figure 4.—The regional demand for National Forest stumpage. Figure 4 displays the elements of demand and supply analysis that are necessary to determine the regional demand for National Forest timber. The supply
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