An econometric analysis of differences in stumpage values using micro-level harvesting data

Abstract

This paper proposes a framework, utilising micro-level harvesting data, that analyses stumpage values with respect to regions, seasons and harvesting size and decomposes differences between regions. Due to the thick-tailed distribution of the data and the presence of heteroscedasticity, the paper gives a comparison of ordinary least squares regression with an iterative weighted least squares (IWLS) estimator and a multiplicative heteroscedastic model. The results underline the importance of taking sample properties into account and support the use of the robust IWLS estimator. There were significant differences in stumpage values over regions with respect to both the characteristics of the timber and the valuation of the different grades. There were no seasonal differences in stumpage value, but the results indicate a significant but minimal loss from the decreasing size of the harvests.