THE STRUCTURE OF FORESTRY PRODUCTION - SHORT-RUN AND LONG-RUN RESULTS

This paper extends the study of regional forestry production to address long-run production possibilities using a restricted profit function approach. The model consists of two outputs, sawtimber and pulpwood; one variable input, regeneration effort; and two quasi-fixed inputs, land and growing stock. Estimation is performed using cross-sectional data of industrial timber production in the southeastern United States. Estimated values include own- and cross-price elasticities between inputs and outputs, Hicksian elasticities of substitution, shadow prices of the quasi-fixed factors, and long-run Marshallian elasticities. While short-run supply elasticities are consistent with earlier studies, long-run results show much greater supply responses as land and management inputs are given time to adjust. These results also suggest that ambiguous results regarding pulpwood and sawtimber substitutability found in previous studies can be explained by a shift from complementarity in the short run to substitutability in the long run.