RT Journal Article
SR Electronic
T1 The Dynamic Behavior of Efficient Timber Prices
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 95
OP 108
DO 10.2307/3147146
VO 80
IS 1
A1 McGough, Bruce
A1 Plantinga, Andrew J.
A1 Provencher, Bill
YR 2004
UL http://le.uwpress.org/content/80/1/95.abstract
AB A simple theoretical model of a timber market finds that there exists a rational expectations equilibrium in which prices evolve according to a stationary A R (1) process. Simulations analyze a model with a more general representation of timber stock dynamics. Implications for the optimal harvesting literature are: 1) market efficiency provides little justification for random walk prices; 2) unit root tests, used in previous studies to analyze the informational efficiency of timber markets, do not distinguish between efficient and inefficient markets; and 3) failure to recognize asymmetric disturbances in time-series analyses of historical timber prices can lead to sub-optimal harvesting rules. (JEL Q23)