Scandinavian Working Papers in Business Administration

Working Papers,
Örebro University, School of Business

No 2013:1: Stumpage Prices in Sweden 1909-2011: Testing for Non-Stationarity

Linda Andersson (), Lars Hultkrantz () and Panagiotis Mantalos ()
Additional contact information
Linda Andersson: Department of Business, Economics, Statistics and Informatics, Postal: Örebro University, Swedish Business School, SE - 701 82 ÖREBRO, Sweden
Lars Hultkrantz: Department of Business, Economics, Statistics and Informatics, Postal: Örebro University, Swedish Business School, SE - 701 82 ÖREBRO, Sweden
Panagiotis Mantalos: Department of Business, Economics, Statistics and Informatics, Postal: Örebro University, Swedish Business School, SE - 701 82 ÖREBRO, Sweden

Abstract: The price of timber stumpage is one of the few natural-resource rents that can be directly observed as a market price. Rules for optimal timber harvesting under uncertainty have been found to depend on whether the timber rent price is non-stationary or stationary. In this study we extend previous research by Hultkrantz (1995) that tested for unit-root with an exogenous break point in Swedish stumpage prices from 1909-1990, employing data up to 2011, hence for 103 years, and unit-root tests with an endogenously selected break point. We find support for a structural level break at the end of WW2 and that non-stationarity can be rejected. We show that this is a robust conclusion.

Keywords: Roundwood; timber; natural-resource rents; unit root

JEL-codes: Q23

25 pages, January 11, 2013

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