Stumpage market integration in western national forests

This study presents results of statistical tests for stumpage market integration on 62 national forests in the Western United States. Quarterly stumpage prices from 1984 to 2007 obtained from cut and sold reports for USDA Forest Service Regions 1, 4, 5, and 6 (Northern, Intermountain, Pacific Southwest, and Pacific Northwest, respectively) were analyzed to establish the presence and extent of national forest timber markets. Statistical evidence suggests that prices from the Beaverhead-Deerlodge and Salmon-Challis Forests and the Kootenai and Idaho Panhandle Forests are linked and that only these two sets of forests can be modeled as integrated stumpage markets. Aside from these four forests, there is no evidence that the law of one price holds for national forest timber markets in the West.