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Lumber Futures and Timberland Investment

Author

Listed:
  • Sherwood Clements

    (Georgia State University)

  • Alan J. Ziobrowski

    (Georgia State University)

  • Mark Holder

    (Kent State University)

Abstract

Using 20 years of data, we derive a pricing model for timberland market values. We examine the relationship between lumber futures, capitalization rates, anticipated inflation, anticipated construction and timberland value. Using an ordinary least squares regression model and Johansen’s cointegration technique, we find that timberland market values have a long-run significant positive equilibrium relationship with lumber futures, and building permits. Capitalization rates have a significant negative relationship as expected. In the short run, unanticipated shocks in the independent variables provide a permanent change in timberland market values.

Suggested Citation

  • Sherwood Clements & Alan J. Ziobrowski & Mark Holder, 2011. "Lumber Futures and Timberland Investment," Journal of Real Estate Research, American Real Estate Society, vol. 33(1), pages 49-72.
    • Handle: RePEc:jre:issued:v:33:n:1:2011:p:49-72
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    Citations

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    Cited by:

    1. Mei, Bin, 2019. "Timberland investments in the United States: A review and prospects," Forest Policy and Economics, Elsevier, vol. 109(C).
    2. Shikong Luo & Alan Tidwell & Sherwood Clements, 2022. "Does Political Uncertainty Affect Residential Development?," The Journal of Real Estate Finance and Economics, Springer, vol. 65(4), pages 572-592, November.
    3. Zhang, Nan & Mei, Bin & Li, Yanshu, 2023. "A review of the financial performance of lumber futures and some prospects," Forest Policy and Economics, Elsevier, vol. 157(C).
    4. Clements, Sherwood & Tidwell, Alan & Jin, Changha, 2017. "Futures markets and real estate public equity: Connectivity of lumber futures and Timber REITs," Journal of Forest Economics, Elsevier, vol. 28(C), pages 70-79.
    5. Mei, Bin & Clutter, Michael L., 2020. "Return and information transmission of public and private timberland markets in the United States," Forest Policy and Economics, Elsevier, vol. 113(C).
    6. Gao, Lei & Mei, Bin, 2013. "Investor attention and abnormal performance of timberland investments in the United States," Forest Policy and Economics, Elsevier, vol. 28(C), pages 60-65.

    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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