Meta-Analysis of Price Responsiveness of Timber Supply

Modeling and projecting timber supply requires a good understanding of how supply responds to price. The price elasticity of supply (PELS) reported in the literature varies greatly, indicating that conclusions regarding price signaling in the timber market are mixed. Therefore, we conducted a meta-analysis to determine the key factors associated with the heterogeneity of PELS of primary timber product supply by examining data from numerous studies conducted around the world. Twelve "moderator" variables were examined to explore differences in PELS. Moderators with significant impacts on variation of PELS included forest products, geographic regions, econometric models, and data type. Furthermore, two-level categorical variables contained within the econometric models including standing stock were found to have significant influence on the heterogeneity of PELS. Variation in PELS also depended on whether or not the supply models accounted for price inflation, and the time period when the study was conducted. These findings may improve the understanding of the dynamics of price signaling in timber markets, and further improve the efficiency of timber supply and forecasting models for market participants and policy makers.