Analysis of Lumber Price Transmission in the United States

The lumber industry in the South is an important sector, and has connections with many other key industries. The dynamics of the southern lumber market and its linkage with other related markets can be examined by the price transmissions. The first part of this study investigates vertical price transmission traced back to delivered sawlog market and stumpage market, and arrives at the conclusion that the supply chain is generally efficient with positive asymmetric transmission involved in one product. The second part explores the relationship between markets of the South and Pacific Northwest and concludes that the two markets are more balanced with each other after various demand and supply shocks with two regime switching models. This research will benefit market participants and policy makers to update their knowledge and obtain efficient information before decision making