Vertical price transmission in timber and lumber markets |
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| Institution: | 1. Institute for Biodiversity and Ecosystem Dynamics, University of Amsterdam, The Netherlands;2. Department of Environmental Economics, Institute for Environmental Studies, VU University Amsterdam, The Netherlands;1. Department of Business Administration, Shahjalal University of Science & Technology, Sylhet, Bangladesh;2. Department of Management Sciences, The Superior College, Lahore, Pakistan;3. Universiti Utara Malaysia, Malaysia;4. Martin Tuchman School of Management, New Jersey Institute of Technology, USA;5. Labuan Faculty of International Finance, University Malaysia Sabah, Malaysia;1. Department of Economics, Finance & Legal Studies, Culverhouse College of Commerce, University of Alabama, United States;2. Department of Accounting and Finance, Turner College of Business, Columbus State University, United States;3. Department of Economics, College of Business Administration, Hanyang University, Republic of Korea |
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| Abstract: | Timber and lumber markets are linked and integrated through prices at several stages along timber supply chain. In this study, the degree of vertical integration and the presence of asymmetric price transmission are investigated for sawtimber and lumber products in the southern and western United States. The data utilized are quarterly stumpage price, delivered timber price, and lumber price of softwood between 1977 and 2011. Linear and threshold cointegration models are used for long-term price analyses, and symmetric and asymmetric error correction models are used for short-term price analyses. The integration in the early stage (i.e., stumpage/delivered timber price pair) is found to be stronger than that in the latter stage (i.e., delivered/lumber price pair). The South shows slightly stronger market cointegration than the West. Asymmetric price transmission is found along the timber supply chain. In the long term, prices are more responsive when the price margin is increased than decreased. |
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| Keywords: | Asymmetric price transmission Error correction model Market integration Threshold cointegration |
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