Stumpage price determination in China's collective forest region, Zhejiang as an example

Few studies have analyzed the performance of stumpage sales ensuing the tenure reform and market liberalization in China's southern collective forest region. In this paper we investigate the price formation and determination of recent stumpage sales in southwestern Zhejiang, using a line hedonic pricing model, robust bootstrap semi logarithmic quantile regression hedonic pricing model and transaction data from the four sample counties there and matching analysis. Our results reveal that in general, better-stocked forests have higher stumpage value, larger tracts tend to sell for a relatively lower price, and contract duration and distance to market for sales on the spot markets are significant but they are not for sales at the trading centers. Also, substantial heterogeneities are present in the forest conditions and the behaviors of different groups of buyers and sellers. When the sales on spot markets and trading centers are combined, it is found that sales at the trading centers result in a higher stumpage price. But it is too soon to generalize that a higher price of sales exists at any centralized trading platform, and this higher price must be weighted against such drawbacks as infrequent activity and transaction cost. Meanwhile, the spot markets seem more sensitive to local conditions.