Sawlog prices and quality differences in Canadian and United States Pacific coastal log markets

Abstract

This paper introduces a methodology grounded on economic theory for comparing wood quality between regions. The methodology, which is based on index numbers, is applied to data on volumes and prices of sawlogs traded in the Canadian and United States Pacific Coastal Log Markets from 1957 through 1982. The quality of sawlogs traded was found to be higher on average in the United States than in Canada, but the U.S. advantage declined over time. The measure of wood quality is then used to adjust average log market prices for quality differences. Contrary to U.S. claims, the U.S. industry enjoyed a wood cost advantage during most of the sample period. The lower price of wood in Canada could be explained by its lower quality.