An Economic Model of Public Timber Sales

The inconsistencies between responsible and objective opinions and facts regarding conflicts over public timber sales are, in part, the the result of grouping all sales into one market category. The meaning of observations can be better inferred by separating the relationships between "effective capacity" and available timber supply into three categories: (1) a balance, (2) excess supply, and (3) excess effective capacity. The expected bidding behavior differs by each category. Sealed bidding probably leads to higher bid-appraisal ratios than does oral auctions, and the difference should be greatest where excess capacity prevails. The limitations for making inferences suggest a need for studies regarding firm and market performance in terms of desired social goals. Some normative observations are offered regarding the residual-value appraisal model, transaction evidence, sealed vs. oral bidding, and collusion.