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Informational Efficiency of Markets for Stumpage

Author

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  • Courtland L. Washburn
  • Clark S. Binkley

Abstract

This paper examines the weak-form informational efficiency of markets for pine sawtimber stumpage in the U.S. South. Analyses of annual and quarterly rates of price change generally indicate that stumpage markets are efficient. When viewed over monthly intervals, stumpage markets do not pass the tests for weak-form efficiency. This failure is attributed to friction in the market due to the time and cost involved in consumating timber sales. The results have implications for price-responsive timber harvest scheduling, for the application of asset pricing models to forestry investments, and for policies governing sales of timber from public lands.

Suggested Citation

  • Courtland L. Washburn & Clark S. Binkley, 1990. "Informational Efficiency of Markets for Stumpage," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(2), pages 394-405.
    • Handle: RePEc:oup:ajagec:v:72:y:1990:i:2:p:394-405.
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    File URL: http://hdl.handle.net/10.2307/1242342
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    Citations

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    Cited by:

    1. Plantinga, Andrew J. & Provencher, Bill, 2001. "Internal Consistency In Models Of Optimal Resource Use Under Uncertainty," 2001 Annual meeting, August 5-8, Chicago, IL 20712, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Gjolberg, Ole & Guttormsen, Atle G., 2002. "Real options in the forest: what if prices are mean-reverting?," Forest Policy and Economics, Elsevier, vol. 4(1), pages 13-20, May.
    3. Stordal, Stale & Nyrud, Anders Q., 2003. "Testing roundwood market efficiency using a multivariate cointegration estimator," Forest Policy and Economics, Elsevier, vol. 5(1), pages 57-68, January.
    4. Gong, Peichen & Löfgren, Karl Gustaf, 2007. "Market and welfare implications of the reservation price strategy for forest harvest decisions," Journal of Forest Economics, Elsevier, vol. 13(4), pages 217-243, November.
    5. Mehrotra, Shiv N. & Kant, Shashi, 2009. "Use of composite forest commodity price indices for cointegration analysis," Journal of Forest Economics, Elsevier, vol. 15(4), pages 237-260, December.
    6. Bruce McGough & Andrew J. Plantinga & Bill Provencher, 2004. "The Dynamic Behavior of Efficient Timber Prices," Land Economics, University of Wisconsin Press, vol. 80(1), pages 95-108.
    7. Kanieski da Silva, Bruno & Schons, Stella Z. & Cubbage, Frederick W. & Parajuli, Rajan, 2020. "Spatial and cross-product price linkages in the Brazilian pine timber markets," Forest Policy and Economics, Elsevier, vol. 117(C).
    8. Hultkrantz, Lars & Andersson, Linda & Mantalos, Panagiotis, 2014. "Stumpage prices in Sweden 1909–2012: Testing for non-stationarity," Journal of Forest Economics, Elsevier, vol. 20(1), pages 33-46.
    9. Gong, Peichen & Löfgren, Karl-Gustaf, 2005. "Market and welfare implications of the reservation price strategy for forest harvest decisions," Umeå Economic Studies 664, Umeå University, Department of Economics.
    10. Kanieski Da Silva, Bruno & Abt, Robert & Cubbage, Frederick W., 2018. "Pulpwood Market Dynamics: The Effects Of Wood Pellet Production," 2018 Annual Meeting, August 5-7, Washington, D.C. 273994, Agricultural and Applied Economics Association.
    11. Eriksson, Ljusk Ola & Sallnas, Ola & Stahl, Goran, 2007. "Forest certification and Swedish wood supply," Forest Policy and Economics, Elsevier, vol. 9(5), pages 452-463, January.
    12. Zhou, Mo & Buongiorno, Joseph, 2005. "Price transmission between products at different stages of manufacturing in forest industries," Journal of Forest Economics, Elsevier, vol. 11(1), pages 5-19, June.

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