A test of the Hotelling rule using old‐growth timber data

Abstract.  The paper tests Hotelling's prediction that scarcity rent for a non‐renewable resource will rise at the rate of discount in a market equilibrium. We perform the test using data for old‐growth timber, a resource that is effectively non‐renewable. In contrast to previous studies, for this resource a measure of scarcity rent is directly observable in the form of stumpage price bids in timber auctions. We construct a model that allows for replanting and captures the institutional framework of the western U.S. timber market. The modified Hotelling rule that we derive is not rejected in several of our specifications.     

HECKSHER-OHLIN IN CANADA: NEW ESTIMATES OF REGIONAL WAGES AND LAND PRICES

Many immigrant-receiving and land-abundant countries experienced a diminishing ratio of wages to land prices during the globalisation era from 1870 to 1910. Factor price evidence suggests that Canada does not fit the pattern. We present the first Canadian estimates of region-specific wages and land prices that span the period from 1871 to 1925. Our evidence indicates that while Canada as a nation looks like an anomaly in the era of convergence, this is largely an artefact of aggregating the experience of the labour-abundant eastern provinces with the late-settling and land-abundant western provinces.