Econometric analysis of Alabama's pulpwood market

This paper presents an econometric analysis of factors influencing demand and supply of pulpwood in Alabama. The softwood and hardwood pulpwood markets were modeled simultaneously as a partial equilibrium system, where equalities of supplies and demands determine prices. Estimation of the parameters was done using two-stage least squares. Price elasticities of supply were found to be similar to those previously reported for the U.S. South (Newman 1987, Carter 1992). The substitution role of sawtimber in hardwood pulpwood supply is consistent with findings for Sweden and the U.S. South (Brannlund et al. 1985, Newman 1987). Results indicate that softwood and hardwood demands are complementary and that a substitution relationship exists between Alabama and Mississippi pulpwood. Regression results can be used for short-run predictions.