Journal of Forest Economics > Vol 20 > Issue 1

Stumpage prices in Sweden 1909–2012: Testing for non-stationarity

Lars Hultkrantz, , lars.hultkrantz@oru.se Linda Andersson, , Panagiotis Mantalos, ,
 
Suggested Citation
Lars Hultkrantz, Linda Andersson and Panagiotis Mantalos (2014), "Stumpage prices in Sweden 1909–2012: Testing for non-stationarity", Journal of Forest Economics: Vol. 20: No. 1, pp 33-46. http://dx.doi.org/10.1016/j.jfe.2013.07.003

Published: 0/1/2014
© 0 2014 Lars Hultkrantz, Linda Andersson, Panagiotis Mantalos
 
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Keywords
RoundwoodTimberNatural-resource rentsUnit root
 

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In this article:
Introduction
Timber supply and the timber price process
Stumpage prices in Sweden 1909–2012
Testing for unit root
Discussion
Conclusions

Abstract

The price of timber stumpage is one of the few natural-resource rents that can be directly observed as a market price. Rules for optimal timber harvesting under uncertainty have been found to depend on whether the timber rent price is non-stationary or stationary. In this study we extend previous research by Hultkrantz (1995) that tested for unit-root with an exogenous break point in Swedish stumpage prices from 1909 to 1990, employing data up to 2012, hence for 104 years, and unit-root tests with endogenously selected break points. We find support for a structural level break at the end of WW2 and that non-stationarity can be rejected. We show that this is a robust conclusion. There is thus no sign of a new break in the extended recent time period and no signal of a secular increase of timber resource scarcity.

DOI:10.1016/j.jfe.2013.07.003