Evaluation of the Effectiveness of Market Responses to Timber Scarcity Problems

Excerpts from the report Introduction: The effectiveness of free markets in increasing quantities of timber supplies has been a forestry issue for centuries. Doubts about market effectiveness have prompted establishment of many public and private programs designed to improve forest management and timber utilization. However, the comparative merits of market mechanisms versus public programs have not been thoroughly analyzed. In this paper we will examine existing literature on the market responsiveness of timber and agricultural resource supplies to price changes and discuss the implications of this research for public and private policies and programs. Increased debate about public and private mechanisms for eliciting socially desirable levels of wood fiber supplies is likely. To provide a better basis for policy discussions, we initiated the research described here to review the economic theory underlying free markets and to collect information on the market responsiveness of various natural resources and the effects of public policies on supply