Skip to main content
SpringerLink
Log in

A spatial equilibrium analysis of Southern Pine lumber pricing and allocation

  • Published:
The Annals of Regional Science Aims and scope Submit manuscript

Abstract

The objective of this paper is to determine the optimum allocation and pricing pattern of Southern Pine lumber as well as to evaluate the current and future demand-supply situation. With regard to the latter, spatial equilibrium of the Southern Pine lumber market is analyzed, and a comparative statics approach involving two equilibrium points is employed. The year 1981 is chosen as the initial point in time. The future date of 1984 is selected to be used for comparative statics analysis. A spatial solution—the optimal allocation and pricing pattern—will be obtained by using the Takayama-Judge and the Liew-Shim quadratic spatial equilibrium models. In estimating regional demand and supply functions, which are critical for the analysis, the two-stage least-squares estimation method will be used, based on apooled sample of cross section and time series for the period 1971–1981. As a result of comparing the optimum 1984 solution with the 1981 solution, it is expected that some of the areas under study can experience a tight supply of Southern Pine lumber, and consequently, lumber production-consumption balances will result in deficit production.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  1. D. Adams and R. Haynes, “The 1980 Softwood Timber Assessment Market Model: Structure, Projections, and Policy Simulations,”Forest Science, Monograph 22 (September 1980).

  2. P. Balestra and M. Nerlove, “Pooling Cross Section and Time Series Data in the Estimation of a Dynamic Model: The Demand for Natural Gas,”Econometrica, 34 (1966), pp. 585–612.

    Google Scholar 

  3. R. W. Cottle and G. B. Danzig, “Complementary Pivoy Theory of Mathematical Programming,”Linear Algebra and Its Applications 1 (1968), pp. 103–125.

    Google Scholar 

  4. L. Davis, E. Lyons and H. Burkhardt, “A Spatial Equilibrium Analysis of the Southern Applachian Hardwood Lumber Using Industry,”Forest Science, 18 (1972), pp. 247–260.

    Google Scholar 

  5. William A. Duerr, “Timber Supply: Goals, Prospects, Problems,”American Journal of Agricultural Economics 56 (Dec. 1974), pp. 927–935.

    Google Scholar 

  6. D. Gujarati, “Use of Dummy Variables in Testing for Equality Between Sets of Coefficients in Linear Regressions: A Generalization,”The American Statistician (Dec. 1970), pp. 18–22.

  7. M. Hallberg and R. Clemente,The Pulp and Paper Industry in the Northeast, Pennsylvania State University Program Report 313 (1971).

  8. R. Haynes,A Dynamic, Spatial Equilibrium Model of the Softwood Timber Economy with Demand Equations Specified. Ph.D. thesis. North Carolina State University, Raleigh (1975).

    Google Scholar 

  9. I. Holland, and G. G. Judge, “Estimated Interregional Flows of Hardwood and Softwood Lumber,”Journal of Forestry 61 (1963), pp. 488–492.

    Google Scholar 

  10. D. Holley, “Location of the Softwood Plywood and Lumber Industries: A Regional Programming Analysis,”Land Economics, 46 (1970), pp. 157–167.

    Google Scholar 

  11. D. Holley, R. W. Haynes, and H. F. Kaiser,An Interregional Timber Model for Simulating Change in the Softwood Forest Economy. North Carolina State Univ. Sch. for Resour., Tech. Rep. 54 (1975).

  12. C. E. Lemke, and J. T. Howson, Jr., “Equilibrium Points of Bi-Matrix Games,”Journal Soc. Indust. Appl. Math. (1964), pp. 413–23.

  13. C. K. Liew, and Jae K. Shim, “A Spatial Equilibrium Model: Another View,”Journal of Urban Economics 5 (1978), pp. 526–534.

    Google Scholar 

  14. B. McCarl and T. Spreen, “Price Endogenous Mathematical Programming as a Tool for Sector Analysis,”American Journal of Agricultural Economics, 62 (February 1980).

  15. W. L. M. McKillop, “Supply and Demand for Forest Products—An Econometric Study,”Forest Products Journal, 18 (1967), pp. 1–132.

    Google Scholar 

  16. W. J. Mead,Competition and Oligopsony in the Douglas Fir Lumber Industry, University of California Press, Berkeley, 1966.

    Google Scholar 

  17. National Forest Products Association,Fingertip Facts and Figures, various monthly issues, 1967–1980.

  18. Y. Plessner, “Activity Analysis, Quadratic Programming and General Equilibrium,”International Economic Review, 8 (June 1967).

  19. P. A. Samuelson, “Spatial Equilibrium and Linear Programming,”American Economic Review, 42 (1952), pp. 283–303.

    Google Scholar 

  20. Jae K. Shim, “Pooling Cross Section and Time Series Data in the Estimation of Regional Demand and Supply Functions,”Journal of Urban Economics, 11 (1982), pp. 229–241.

    Google Scholar 

  21. -,Spatial Equilibrium Analysis of the U.S. Lumber Market—An Application of Quadratic Programming, Unpublished Ph.D. dissertation, University of California at Berkeley, 1973.

  22. Southern Forest Products Association,Southern Pine Costs, various monthly issues, 1970–1982.

  23. -,Distribution of Southern Pine Shipments, monthly issues, 1970–1982.

  24. T. Takayama and G. Judge, “Equilibrium Among Spatially Separated Markets: A Reformulation,”Econometrica, 32 (October 1964).

  25. T. Takayama and G. Judge,Spatial and Temporal Price and Allocation Models, Amsterdam: North-Holland Publishing Co. (1971).

    Google Scholar 

  26. Noel, D. Uri, “A Spatial Equilibrium Analysis of Electrical Energy Pricing and Allocation,”American Journal of Agricultural Economics, 58 (November 1976), pp. 653–662.

    Google Scholar 

  27. U.S. Department of Agriculture, Forest Service,The Demand and Price Situation for Forest Products, various annual issues, 1970–1982.

  28. U.S. Department of Commerce,Survey of Current Business and Business Conditions Digests, various monthly issues, 1970–1982.

  29. -,Construction Review, various monthly issues, 1970–1982.

  30. -,Industrial Outlook, various monthly issues, 1970–1982.

  31. U.S. Department of Labor, Bureau of Labor Statistics,Wholesale (Producer) Prices and Price Indexes, various monthly issues, 1970–1982.

  32. M. Von Oppen and John T. Scott, “A Spatial Model for Plant Location and Inter-regional Trade,”American Journal of Agricultural Economics, 58 (August 1976), pp. 437–445.

    Google Scholar 

  33. J. C. Wade and E. O. Heady, “A Spatial Equilibrium Model for Evaluating Alternative Policies for Controlling Sediment from Agriculture,”Management Science, 24 (February 1978), pp. 633–644.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. California State University at Long Beach, USA

    Jae K. Shim (Professor of Business Administration)

Authors
  1. Jae K. Shim
    View author publications

    You can also search for this author in PubMed Google Scholar

Additional information

The author wishes to thank Professors C. B. McGuire, Bill F. Roberts, and Henry Vaux of the University of California at Berkeley for their valuable comments.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Shim, J.K. A spatial equilibrium analysis of Southern Pine lumber pricing and allocation. Ann Reg Sci 19, 61–76 (1985). https://doi.org/10.1007/BF02078775

Download citation

  • Received:

  • Revised:

  • Issue Date:

  • DOI: https://doi.org/10.1007/BF02078775

Keywords

Search

Navigation