Service Timber Research Articles

Nonparametric Identification and Inference of First-Price Auctions with Heterogeneous Bidders

In the auction literature, it is well established that bidders’ asymmetry plays an important role in determining auction revenues. In this article, we propose a nonparametric methodology to analyze first-price auctions with two popularly adopted asymmetries: heterogeneous risk preferences and asymmetric value distributions. We find that the two competing models provide distinct implications for the bid distributions conditional on heterogeneity. By modeling bidders’ asymmetry as unobserved heterogeneity, we show that the conditional bid distributions are identified nonparametrically. These results enable researchers to test the two competing models. In an application using the US Forest Service timber auction data, we find that the data supports the model with heterogeneity in risk preference.

Borates in remedial treatments for timber in service

Large preservative-treated timbers and poles can develop internal and external decay as they age in service. Arresting this damage can pose a challenge, especially internal decay. Boron plays an important role in helping arrest fungal attack in a variety of applications. This paper discusses the use of borates as a component in pastes for limiting external decay and the use of boron solutions or rods for arresting internal decay. Long-term field trials show that boron movement is initially slow, but boron was found in Douglas-fir poles almost 30 years after application. The results illustrate the value of boron as a remedial treatment for limiting fungal attack in timber in service.

Supporting site planning through monetary values for biomass and nature conservation services from ecosystem accounts

Ecosystem services can be measured physically, but also valued in monetary terms. In public planning and decision-making in Germany, multi-criteria analysis is usually used to inform decision-makers about different impacts of projects, for example, for housing and the siting of industrial or infrastructure projects. Typically, these evaluations are based on various environmental, social and economic impacts using their own specific methods and then juxtapose the different results, without providing further support for weighing various concerns. Economic evaluations attempt to assess preferences of individuals and society in relation to the outcomes that are relevant for a decision, thereby providing further support to decision-makers. Although so-called welfare values are usually used for this purpose in cost-benefit analysis, it can be shown that, in certain cases, exchange values from environmental economic accounting also fulfil that objective. This is demonstrated for the case of site planning, using maps of economic values of biomass provisioning services and ecosystem services for nature conservation. The ecosystem service values used for this purpose were determined spatially explicitly nationwide for Germany. Services for nature conservation were calculated as average costs to develop one ´biotope value point´. This unit is used in German planning law to determine ecological compensation measures for impacts on nature. Cost data were calculated from nature conservation measures to fulfil the requirements of the EU Habitats Directive. As a proxy for the biomass provisioning service, hypothetical agricultural land-lease rates with different yield potential were estimated throughout Germany. Due to a lack of other spatially specific data, timber services were valued with the average net profit of forestry businesses. A comparison shows that, on average, services for nature conservation have higher values than biomass provisioning services. This is the case even for arable land.

Nonparametric Identification of First-Price Auctions with Heterogenous Bidders

In the auction literature, it is well established that bidders' asymmetry plays an important role in determining auction revenues. In this paper, we propose a nonparametric methodology to analyze first-price auctions with two popularly adopted asymmetries: heterogeneous risk preferences and asymmetric value distributions. We find that the two competing models provide distinct implications for the bid distributions conditional on heterogeneity. By modeling bidders' asymmetry as unobserved heterogeneity, we show that the conditional bid distributions are identified nonparametrically. These results enable researchers to distinguish between the two competing models. The Monte Carlo experiments demonstrate the good performance of the proposed method. In an application using the US Forest Service timber auction data, we find that the data support the model with heterogeneity in risk preference.

Identification of Auction Models Using Order Statistics

Auction data often contain information on only the most competitive bids as opposed to all bids. The usual measurement error approaches to unobserved heterogeneity are inapplicable due to dependence among order statistics. We bridge this gap by providing a set of positive results. First, we show that symmetric auctions are identifiable using three consecutive order statistics or two consecutive ones with an instrument. Second, we introduce competition intensity, i.e., the number of bidders, as additional unobserved heterogeneity. Third, we extend our results to asymmetric auctions. Lastly, we apply our methods to U.S. Forest Service timber auctions and find that ignoring unobserved heterogeneity reduces both bidder and auctioneer surplus.

Estimating Auctions with Externalities: The Case of USFS Timber Auctions

Abstract I introduce an empirical auction model where in addition to the private value that each bidder receives upon winning the auction, losing bidders incur a negative externality that depends on the identity of the rival winner. I show how the externalities and private value distributions can be identified and estimated in such a model. I then apply the model to U.S. Forest Service timber auctions. I find that mill bidders impose significant externalities on one another of between 10% and 22% of the heterogeneous portion of their valuation. This leads the timber tracts to be misallocated in 5.2% of the auctions in my sample.

Damage detection of in service timber poles using Hilbert-Huang transform

Timber utility poles represent a significant part of Australia's infrastructure for electricity distribution and telecommunication networks. Annual replacement of timber poles are undertaken to avoid pole failures and approximately 40–50 million dollars are spent annually on maintenance and asset management. However, currently practiced inspection techniques for timber poles are mostly subjective in nature and have a lack of reliability, hence, the condition-assessment results provide great difficulties for the asset owners to plan the renewal works. Commonly used wave-propagation based non-destructive testing (NDT) techniques for piles and other concrete structures were adopted and modified to assess the condition of timber poles. The effectiveness of the developed method to detect defects relies on the propagation and reflection of generated shear waves by a transverse impact. However, the orthotropic material properties of timber, the effect of soil embedment, the availability of natural imperfections in timber, and a highly dispersive nature of shear wave propagation make the analysis complex. Therefore, advanced signal-processing techniques are required to identify the damage, the damage location and to accurately assess the damage severity. This paper focuses on damage detection of timber poles using Hilbert-Huang transform as an effective time-frequency analysis technique. A numerical model for an in-situ pole system is developed to simulate the shear wave propagation and to evaluate the capability of the proposed signal-processing technique for an accurate detection of damages. The developed numerical model is validated with the experimental data from the pole yard test and with the data from field-testing. The validated model is then used to simulate different defect profiles, locations and multiple damages to further evaluate the effectiveness of the proposed damage detection technique.

Are non-industrial private forest owners willing to deliver regulation ecosystem services? Insights from an alpine case

As non-industrial private forest owners own a large share of forests in Europe, their management choices can largely affect the delivery of forest ecosystem services of different types: provisional, regulation and cultural. The literature is rich in studies exploring the delivery of both provisional services (timber or wood products) and cultural ones (recreation or amenity). However, fewer researches have addressed the delivery of regulation services like regulation of climate, carbon sequestration or preservation of habitats. The paper intends to contribute to this scarce literature with a Southern European case study. It analyses whether non-industrial private forest owners from an Italian alpine region would be willing to deliver additional (i.e. beyond legal requirements) quantities of regulation forest ecosystem services, whether they would do so with or without payment, and what affects such willingness. Three services are analysed: habitat improvement, soil conservation and carbon sequestration. Three multinomial logit models are estimated on a sample of 106 non-industrial forest owners. The results show, among others, that the willingness to deliver regulation forest ecosystem services is enhanced when the service impacts also on the property scale: this result concurs with the literature which shows that non-industrial private forest owners very often maximise not only their profit but also their overall utility by considering the self-consumption of services. The paper concludes by providing indications for targeting and tailoring active forest management policies focused on non-industrial forest owners of Italian alpine regions.

Valuation of ecosystem services: paradox or Pandora’s box for decision-makers?

Provisioning services Timber Market valuation Market prices Non-timber products Market valuation Market prices Woody biomass for energy Market valuation Market prices Regulating services Carbon sequestration Climate regulation Cost-effectiveness Market valuation MAC (costs per tCO2) Market prices (if CO2 is traded) Erosion alleviation Shelter belts Replacement, relocation and avoided cost methods Avoided losses in yields or cost of increased yields Air quality Avoided cost methods Avoided losses Flood regulation Benefit transfer (BT) Relocation and avoided cost methods BT estimates Avoided losses Cultural services Recreation CVM, Choice experiments (CE) or TC methods, Indirect market valuation Willingness to pay (WTP) values or TC estimates, market pricing

A NONPARAMETRIC TEST FOR COMPARING VALUATION DISTRIBUTIONS IN FIRST‐PRICE AUCTIONS

This article proposes a nonparametric test for comparing valuation distributions in first‐price auctions. Our test is motivated by the fact that two valuation distributions are the same if and only if their integrated quantile functions are the same. Our method avoids estimating unobserved valuations and does not require smooth estimation of bid density. We show that our test is consistent against all fixed alternatives and has nontrivial power against root‐N local alternatives. Monte Carlo experiments show that our test performs well in finite samples. We implement our method on data from U.S. Forest Service timber auctions.

Identification of first-price auctions with non-equilibrium beliefs: A measurement error approach

This paper studies identification and estimation of two models for first-price auctions: (1) bidders’ beliefs about their opponents’ bidding behavior are not in equilibrium but follow “level-k” thinking, and (2) bidders’ values are asymmetrically distributed. Exploiting the nonparametric methodology developed for measurement error models (e.g., Hu, 2008), we show that both models can be identified by a unified methodology. The proposed methodology is applied to US Forest Service timber auction data and the estimation results suggest that bidders hold heterogeneous and non-equilibrium beliefs.

Bailouts and the Preservation of Competition: The Case of the Federal Timber Contract Payment Modification Act

We estimate the value of competition in United States Forest Service (USFS) timber auctions, in the context of the Reagan administration's bailout of firms that faced substantial losses on existing contracts. We use a model with endogenous entry by asymmetric firms, allowing survivors to respond to the exit of bailed-out firms by entering more auctions and for these marginal entrants to have lower values than firms that would choose to enter in any event, a selective entry effect. Observed asymmetries and selective entry contribute to us finding that the bailout may have increased USFS revenues in subsequent auctions quite substantially. (JEL D44, H81, H82, L73, Q23)

Characterisation of Postia placenta colonisation during 36 weeks in acetylated southern yellow pine sapwood at three acetylation levels including genomic DNA and gene expression quantification of the fungus

Abstract One way to protect timber in service against basidiomycete deterioration is by means of acetylation via reaction with acetic anhydride. The reason why acetylated wood (WAc) is resistant against decay fungi is still not exactly understood. The aim of this study was to contribute to this field of science, and Postia placenta colonisation after 4, 12, 20, 28 and 36 weeks was observed at three acetylation levels of Pinus spp. sapwood. Mass loss (ML) and wood moisture content (MC) data reflected the acetylation levels. The initial equilibrium MC (EMC) proved to be a good indicator of subsequent ML. Genomic DNA quantification showed P. placenta colonisation in all samples, also in samples where no ML were detectable. The number of expressed gene transcripts was limited, but the findings supported the results of previous studies: WAc seems to have some resistance against oxidative mechanisms, which are part of the metabolism of P. placenta. This leads to a delay in decay initiation, a delay in expression of genes involved in enzymatic depolymerisation, and a slower decay rate. The magnitudes of these effects are presented for each acetylation level. The data also imply that there is no absolute decay threshold at high acetylation levels, but instead a significant delay of decay initiation and a slower decay rate.

ПРОБЛЕМЫ ОРГАНИЗАЦИИ МАРКЕТИНГОВЫХ ИССЛЕДОВАНИЙ ЛЕСОПРОМЫШЛЕННЫХ РЫНКОВ И ИХ ТРАНСПОРТНОГО ОБСЛУЖИВАНИЯ

The article outlines the characteristic of the timber industry as a typical business market, reveals the problems of marketing research of the market and its transport services, and the receipt by each company of the necessary market information or resources identified ways of improving the competitiveness of timber production in the region and transport services timber markets.

Forest Sector and Primary Forest Products Industry Contributions to the Economies of the Southern States: 2011 Update

The analysis in this article provides an update on the southern forest sector economic activity after the downturn experienced in 2008 –2009. The analysis was conducted using Impact Analysis for Planning (IMPLAN) software and data sets for 2009 and 2011 and results from the USDA Forest Service Timber Products Output latest survey of primary wood processing mills. Although improving economic conditions are reflected by increased mill roundwood consumption during 2011, the forest industry’s economic contribution improved slightly but not across all states. At the regional scale, the sector displayed a downward trend in employment, value added, and number of active primary mills.

Diagnostic Evaluation of Insect Attack on Existing Timber Structures: A Review of some Case Studies

The problem of wood-boring insect attacks is gaining greater interest in Italy today. Wood-boring insects (Coleoptera, termites) often cause both structural and aesthetic damage on wooden structures which can sometimes give rise to human health concerns. Possible causes of current insect infestations include the use of timber originating from plantations, as well as bad post-felling practices such as late harvesting and stocking in unsuitable places before final processing. In the past, these insects were not thought to pose an economic threat to timber in service in Italy, but, in recent years, they have become a problem. The aim of this paper is to report on case studies concerning the occurrence of these unusual wood-boring insects on timber in service and, on the basis of the Authors experience, to formulate an in situ inspection protocol. The species we are dealing with in the case studies are: Bostrichus capucinus, family Bostrichidae, associated with Lyctus spp. (Fam. Lyctidae) and Lymexylon navale, family Lymexylonidae, belonging to the group of the so-called ambrosia beetles or pinhole borers. All these species were found on hardwoods, where they had bored into the sapwood except for L. navale which was also able to bore into heartwood, causing major concerns about its potential danger to timber in service. A technical integrated approach in evaluating insect attacks on on-site timber elements is also described here. The assessment is based on different methods, i.e. visual inspection and acoustic detection. This procedure is proposed as a basis for the development of an intervention protocol in the early stages of infestation.

Identification and Inference in Ascending Auctions With Correlated Private Values

We introduce and apply a new nonparametric approach to identification and inference on data from ascending auctions. We exploit variation in the number of bidders across auctions to nonparametrically identify useful bounds on seller profit and bidder surplus using a general model of correlated private values that nests the standard independent private values (IPV) model. We also translate our identified bounds into closed form and asymptotically valid confidence intervals for several economic measures of interest. Applying our methods to much studied U.S. Forest Service timber auctions, we find evidence of correlation among values after controlling for a rich vector of relevant auction covariates; this correlation causes expected profit, the profit-maximizing reserve price, and bidder surplus to be substantially lower than conventional (IPV) analysis of the data would suggest.

Wald und Klimawandel in der inneralpinen Trockenregion Visp

Forest and climate change in the inner-Alpine dry region of Visp Over the past decades, observed increases in temperature have been particularly pronounced in mountain regions. If this trend should continue in the 21st Century, frequency and intensity of droughts will increase, and will pose major challenges for forest management. Under current conditions drought-related tree mortality is already an important factor of forest ecosystems in dry inner-Alpine valleys. Here we assess the sensitivity of forest ecosystems to climate change and evaluate alternative forest management strategies in the Visp region. We integrate data from forest monitoring plots, field experiments and dynamic forests models to evaluate how the forest ecosystem services timber production, protection against natural hazards, carbon storage and biodiver-sity will be impacted. Our results suggest that at dry low elevation sites the drought tolerance of native tree species will be exceeded so that in the longer term a transition to more drought-adapted species should be considered. At medium elevations, drought and insect disturbances as by bark beetles are projected to be important for forest development, while at high elevations forests are projected to expand and grow better. All of the ecosystem services that we considered are projected to be impacted by changing forest conditions, with the specific impacts often being elevation-dependent. In the medium term, forest management that aims to increase the resilience of forests to drought can help maintain forest ecosystem services temporarily. However, our results suggest that relatively rigid management interventions are required to achieve significant effects. By using a combination of environmental monitoring, field experiments and modeling, we are able to gain insight into how forest ecosystem, and the services they provide, will respond to future changes.

Durability of oak timber bridges – Impact of inherent wood resistance and environmental conditions

Premature failure of timber construction can have dramatic consequences, at worst threat to human life or physical condition. Timber components might perform unexpectedly poor due to insufficient protection by misuse, design, low work execution level, or due to low resistance of the material in use. However, information about the material resistance of prematurely failed structures is usually lacking. Therefore this study aimed on developing a method to display the relationship between damages occurring on structures in service and the resistance against wood-destroying fungi of the material used.Drilling cores taken from wooden structures were found to have the ability to serve as specimens in laboratory decay test when compared to standard specimens. Therefore, drilling cores were sampled from different components of six timber bridges in Hannover, Germany, made from English oak (Quercus robur L.). The cores were submitted to the white rot fungus Trametes versicolor and to soft rot fungi in terrestrial microcosms. The determined mass losses due to fungal decay were compared with the level of damage of the studied bridge components. The results indicated that the material-inherent resistance was responsible for damages rather than poor details of the construction. The methodological approach might be used to provide further knowledge about the relationship of timber in service and under ideal laboratory test conditions.

Set-Asides and Subsidies in Auctions

Set-asides and subsidies are used extensively in government procurement and resource sales. We analyze these policies in an empirical model of US Forest Service timber auctions. The model fits the data well both within the sample of unrestricted sales used for estimation, and when we predict (out-of-sample) outcomes for small business set-asides. Our estimates suggest that restricting entry substantially reduces efficiency and revenue, although it increases small business participation. An alternative policy of subsidizing small bidders would increase revenue and small bidder profit, with little efficiency cost. We explain these findings by connecting to the theory of optimal auction design. (JEL D44, H57, L73, Q23)