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What is the cost of low participation in French Timber auctions?

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  • Raphaële PRÉGET
  • Patrick WAELBROECK

Abstract

How much is the timber from public forests worth? How can the Public Forest Service define a fair market price for standing timber lots? What is the cost of low participation in French timber auctions? To estimate the value of a timber lot we adopt the transaction-evidence appraisal approach using data from timber auctions in Lorraine (Eastern France) accounting for the facts that: (i) the seller’s reserve prices are secret, (ii) there remain many unsold lots, and (iii) the number of bidders varies from one auction to another. Taking into account the endogenous participation in our hedonic price equation for the highest bid, we estimate that, compared to lots that receive two bids, the highest bid is 22% lower when there is only one bid and 37% higher when there are three or more bids.

Suggested Citation

  • Raphaële PRÉGET & Patrick WAELBROECK, 2010. "What is the cost of low participation in French Timber auctions?," Working Papers 10-08, LAMETA, Universtiy of Montpellier, revised Sep 2010.
    • Handle: RePEc:lam:wpaper:10-08
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    File URL: http://www.lameta.univ-montp1.fr/Documents/DR2010-08.pdf
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    References listed on IDEAS

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    1. Niquidet, Kurt & van Kooten, G. Cornelis, 2004. "Are Log Markets Competitive? Empirical Evidence And Implications For Canada-U.S. Trade In Softwood Lumber," 2004 Annual meeting, August 1-4, Denver, CO 19985, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Martijn van Hasselt, 2005. "Bayesian Sampling Algorithms for the Sample Selection and Two-Part Models," Computing in Economics and Finance 2005 241, Society for Computational Economics.
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    Cited by:

    1. Sogn-Grundvåg, Geir & Zhang, Dengjun, 2023. "Commodities failing in auctions: The story of unsold cod in Norway," Journal of Commodity Markets, Elsevier, vol. 29(C).
    2. Pasha Andreyanov & El Hadi Caoui, 2022. "Secret reserve prices by uninformed sellers," Quantitative Economics, Econometric Society, vol. 13(3), pages 1203-1256, July.
    3. Colin Doran & Thomas Stratmann, 2021. "The effects of neighboring parties on the value of rights: Evidence from timber harvests," Southern Economic Journal, John Wiley & Sons, vol. 88(2), pages 705-756, October.
    4. Doran, Colin & Stratmann, Thomas, 2021. "How does liability affect prices? Railroad sparks and timber," International Review of Law and Economics, Elsevier, vol. 66(C).

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