An Econometric Study of the U.S. Hardwood Lumber Market

Abstract Hardwood lumber production and usage have remained roughly constant over the last 30 years while hardwood sawtimber supplies have increased. A recursive econometric model with the causal flow originating from the demand relationship was used to analyze this market. The results indicated that the availability of lower cost substitute materials and the economic uncertainty caused by the recursive aspects of the market have hindered market growth. The increase in nominal price of hardwood lumber is linked to the price of inputs (labor and stumpage) on the supply side of the market and the price of outputs on the demand side of the market. Nominal hardwood lumber price growth is ultimately linked to the general level of national economic activity and general rate of inflation via the effect that the macro economy exerts on prices of consumer goods and wage rates. Forest Sci. 30:1027-1038.