Journal of Forest Economics > Vol 8 > Issue 3

Shadow pricing diversity in U. S. national forests

Frederick Boltz, , fboltz@ufl.edu R. Carter Douglas, , G. Jacobson Michael, ,
 
Suggested Citation
Frederick Boltz, R. Carter Douglas and G. Jacobson Michael (2002), "Shadow pricing diversity in U. S. national forests", Journal of Forest Economics: Vol. 8: No. 3, pp 185-197. http://dx.doi.org/10.1078/1104-6899-00014

Published: 0/0/2002
© 0 2002 Frederick Boltz, R. Carter Douglas, G. Jacobson Michael
 
Subjects
 
Keywords
tobit modelloggingU. S. national forestdiversityshadow price
 

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Abstract

Tobit estimation of the market value of timber sales in national forests of North Carolina demonstrates the important effect of stand diversity on the formulation of bid prices for mixed-species timber tracts. The hedonic model generates a shadow price for diversity according to changes in bid prices, an effective shift in the demand curve for auctioned tracts due to stand diversity attributes. This approach contrasts with traditional shadow price analyses that focus on the supply effects of environmental constraints. Results are corrected for the effects of bidder participation, market conditions, production costs, and other stand attributes. Econometric results demonstrate that stand heterogeneity is a highly significant factor influencing the market value of timber sales from national forests of the Appalachian region. Greater heterogeneity results in lower bid prices for timber sales, indicating a positive shadow price for maintenance of stand diversity.

DOI:10.1078/1104-6899-00014