Accounting for exogenous shocks in determining Southeastern U.S. timber markets



Cohesive markets for pine sawtimber and pine pulpwood were identified across regions in the southeastern United States. Data were provided by TimberMart-South (TMS) and included 40 years of quarterly prices across 22 regions in 11 states. Markets were determined using the law of one-price cointegration while accounting for endogenous structural breaks. The resulting markets for pine pulpwood resulted in one major market spanning from northern Georgia to southern Texas (seven TMS regions) and four markets made up of two TMS regions. Pine sawtimber markets could be interpreted as nine minimarkets or six markets that were driven by three independent markets made up of the largest mill-capacity regions. Compared to earlier studies, the markets were more fractured. The timing of the endogenous breaks was consistent across regions.


Causality, cointegration, forest markets, shocks, time series

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