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Analysis examines economic impacts of stumpage fee increase in British Columbia, indicating significant negative effects.
The impact of a British Columbia policy which increased stumpage fees on the overall economy of the province and on the income distribution of two income classes and regions in British Columbia is investigated. Results indicate that the policy causes a significant decline in employment and income of the province. The results suggest that the decline in real gross domestic product is more than the fall in real income. Income for average households falls by more than that of poor households in response to the policy shock. Results also show that negative economic effects of the policy are higher in the Interior of British Columbia than those on the Coast.
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Alavalapati et al. (1997) studied this question.
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