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An agent-based model of wood markets: Scenario analysis

Author

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  • Holm, Stefan
  • Thees, Oliver
  • Lemm, Renato
  • Olschewski, Roland
  • Hilty, Lorenz M.

Abstract

We present an agent-based model of wood markets. The model covers softwood and hardwood markets for sawlogs, energy wood, and industrial wood. Our study region is a mountainous area in Switzerland that is close to the border, and therefore partially depends on the wood markets of the adjacent countries. The wood markets in this study region are characterized by many small-scale wood suppliers, and a mix of private and public-owned forests. The model was developed to investigate the availability of wood in the study region under different market conditions. We defined several scenarios that are relevant to policy makers and analyzed them with a focus on the two most important assortments of wood in the study region, namely, sawlogs softwood and energy wood softwood. The development of the prices and amounts sold in the scenarios are compared to a business-as-usual scenario. The scenarios were designed to investigate i) the influence of intermediaries, ii) the influence of the profit-orientation of forest owners, iii) the influence of the exchange rate, and iv) the consequences of set-asides in the study region. The presented model has a large potential to support the planning of policy measures as it allows capturing emergent phenomena, and thereby facilitates identifying potential consequences of policy measures planned prior to their implementation. This was demonstrated by discussing the scenario findings with respect to Switzerland's forestry policy objective of increasing the harvested amount of wood to the sustainable potential. We showed that a higher profit-orientation of forest owners would be beneficial for this objective, but also revealed potential conflicts of different economic goals.

Suggested Citation

  • Holm, Stefan & Thees, Oliver & Lemm, Renato & Olschewski, Roland & Hilty, Lorenz M., 2018. "An agent-based model of wood markets: Scenario analysis," Forest Policy and Economics, Elsevier, vol. 95(C), pages 26-36.
    • Handle: RePEc:eee:forpol:v:95:y:2018:i:c:p:26-36
    DOI: 10.1016/j.forpol.2018.07.005
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    References listed on IDEAS

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    1. Leigh Tesfatsion & Kenneth L. Judd (ed.), 2006. "Handbook of Computational Economics," Handbook of Computational Economics, Elsevier, edition 1, volume 2, number 2.
    2. Kostadinov, Fabian & Holm, Stefan & Steubing, Bernhard & Thees, Oliver & Lemm, Renato, 2014. "Simulation of a Swiss wood fuel and roundwood market: An explorative study in agent-based modeling," Forest Policy and Economics, Elsevier, vol. 38(C), pages 105-118.
    3. Richard Carson & Jordan Louviere, 2011. "A Common Nomenclature for Stated Preference Elicitation Approaches," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 49(4), pages 539-559, August.
    4. Weidlich, Anke & Veit, Daniel, 2008. "A critical survey of agent-based wholesale electricity market models," Energy Economics, Elsevier, vol. 30(4), pages 1728-1759, July.
    5. J. Doyne Farmer & Duncan Foley, 2009. "The economy needs agent-based modelling," Nature, Nature, vol. 460(7256), pages 685-686, August.
    6. Tesfatsion, Leigh, 2006. "Agent-Based Computational Economics: A Constructive Approach to Economic Theory," Handbook of Computational Economics, in: Leigh Tesfatsion & Kenneth L. Judd (ed.), Handbook of Computational Economics, edition 1, volume 2, chapter 16, pages 831-880, Elsevier.
    7. Stefan Holm & Renato Lemm & Oliver Thees & Lorenz M. Hilty, 2016. "Enhancing Agent-Based Models with Discrete Choice Experiments," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 19(3), pages 1-3.
    8. Grimm, Volker & Berger, Uta & DeAngelis, Donald L. & Polhill, J. Gary & Giske, Jarl & Railsback, Steven F., 2010. "The ODD protocol: A review and first update," Ecological Modelling, Elsevier, vol. 221(23), pages 2760-2768.
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    Cited by:

    1. Borzykowski, Nicolas, 2019. "A supply-demand modeling of the Swiss roundwood market: Actors responsiveness and CO2 implications," Forest Policy and Economics, Elsevier, vol. 102(C), pages 100-113.
    2. Mager, Elena & Iurato, Chiara & Schanz, Heiner, 2023. "Depicting wood-based sectors to inform policymaking: A structural modeling approach centering on networks of markets," Forest Policy and Economics, Elsevier, vol. 157(C).
    3. Izabella Almirante Porto Tiburcio Rodrigues & Roberta Vianna Alves & Maria José de Oliveira Cavalcanti Guimarães & Thiago Santiago Gomes & Elen Beatriz Acordi Vasques Pacheco, 2022. "Assessment of plastic lumber production in Brazil as a substitute for natural wood," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(8), pages 9705-9730, August.

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