Timber sale value as a function of sale characteristics and number of bidders

Abstract

Examines the effect of sale characteristics and number of bidders on sale value for timber sold by sealed-bid auction on the Green Mountain National Forest in Vermont. As anticipated from theory and previous empirical studies, increasing the number of bidders tended to increase the winning-bid value for the timber auctions studied. Tobit analysis was used because of the high number of timber sale offerings that received no bids. Efforts made to ensure that an offering received at least one qualified bid had a greater impact on sales revenue than efforts made to increase the high-bid value. In designing sales, managers should avoid setting appraisal value too high in relation to timber quality or should seek methods other than timber sales to regenerate poor quality stands.

The impact of timber-sale tract, policy, and administrative characteristics on state stumpage prices: An econometric analysis

“…The prices of particular timber products (e.g., pulpwood) are heavily influenced by the demand and prices for their end product markets (e.g., paper). Studies that found the tree species/product mix in a timber sale to be a significant influence on the price of stumpage include Huang and Buongiorno (1986), Jackson (1987), Puttock et al (1990), Sendak (1991Sendak ( , 1992, and Carter and Newman (1998).…”

“…Product price indices are preferred when assessing how changes to specific product markets influence stumpage prices (Huang and Buongiorno, 1986;Jackson, 1987;Puttock et al, 1990;Sendak, 1991Sendak, , 1992Carter and Newman, 1998;Huebschmann et al, 2004;Dahal and Mehmood, 2005;Niquidet and van Kooten, 2006).…”

“…Thus, several methods have been used to estimate the marginal effect timber-sale characteristics have on the price paid for standing timber. Previous hedonic models that quantify factors influencing stumpage prices have used ordinary least squares (OLS) (Jackson and McQuillan, 1979;Buongiorno and Young, 1984;Puttock et al, 1990;MacKay and Baughman, 1996;Dunn and Dubois, 2000;Dahal and Mehmood, 2005;Leefers and PotterWitter, 2006), Tobit models (Carter and Newman, 1998;Sendak, 1991), and truncated regression models (Niquidet and van Kooten, 2006).…”

An Assessment of Stumpage Payment Methods Used by State and County Timber Sale Programs in the United States

“…Nautiyal and Love (1971) and Flick (1985) suggested that a purchaser of a timber sale sold using the lump-sum method will have increased incentive to remove more volume than the appraised and purchased volume because there is no additional stumpage cost. Sendak (1991) discussed increased utilization specifically on low valued timber sales, while Muraoka and Watson (1983) advocated that the single lump-sum payment of appraised value represents a sunk cost to a purchaser and therefore results in increased utilization.…”

“…If the management objective is to remove a considerable amount of the low value material, than the lump-sum method is best perceived to meet that objective (Sendak 1991). However, timber sales which consist of low value material can require more effort to cruise (as a function of the variability in merchantable volume of individual trees) and are administratively easier to sell with the consumer-scale method (i.e., not requiring substantial effort to cruise, as suggested by program supervisors).…”