The Analysis of Pine Stumpage Prices Based on Timber Sale Characteristics of the Southern United States

Abstract The stumpage price changes were calculated and analyzed from the data collected by Timber Mart-South from 1998 to 2007. We analyzed the relationship between pine sawtimber stumpage prices and timber sale characteristics using hedonic pricing method. Quadratic transformation was employed for sale size and contract length. Stumpage prices increased with sale size, contract length, bid sales, and the number of bidders. The presence of above average or excellent grade, market conditions, and logging conditions also are positively related to stumpage prices.Key Words: stumpage prices, hedonic pricing method, timber-marth-south, timber sale characteristics Received: February 26, 2014. Revised: September 25, 2014. Accep ted: September 29, 2014.Corresponding author: Hojung KimThe Forest Center of Climate Change, Korea Forest Research Inst itute, Seoul 130-712, Republic of KoreaTel: 82-2-961-2888, Fax: 82-2-961-2879, E-mail: hojung.kim.17@gmail.com Introduction Forest landowners often need access to current timber market information because they need to know what they have and how to sell it. Since timber markets basically de-pend on the supply and demand, timber buyers and sellers need up-to-date timber market information such as market trends and trade news. However, it is not an easy task to predict timber price (Mei et al. 2010). Timber market is a function of the relationship between timber and a variety of factors, such as wood consumption, wood supply, pro-duction technology, finished product demand, and stum-page prices, and also the change in timberland ownership may have had a significant influence on timber markets (TMS 2009). Delivered prices include harvesting, trans-portation, and other markups above the stumpage price, and fuel costs and distances to mills will have effect on transportation costs, where wood quality and tract size are the main factors concerning harvest costs (TMS 2009). The hedonic price method is an approach which most commonly uses regression analysis to estimate the implicit values of characteristics from a value of commodity price (Rosen 1974). In the process of manufacturing, some pro-duction inputs could be diverse and have significantly dif-ferent characteristics. In such cases, a hedonic pricing ap-proach is suitably employed for estimating the implicit pri-ces of the various characteristics of an input and the de-mand for the input subsequently (Ladd and Martini 1976). Thus, a hedonic model can be used to explain production factors or the prices of differentiated products. This he-donic price approach has been adapted to timber markets with heterogeneous inputs such as species composition, tree size, volume, and quality based on the assumption that such characteristics affect the lumber production (Puttock et al.