An Assessment of Stumpage Price and the Price Index of Chinese Fir Timber Forests in Southern China Using a Hedonic Price Model

Abstract

Research Highlights: Stumpage price is the most important factor affecting the value of forests. Therefore, an understanding of the factors affecting stumpage prices and trends is critical for effective forest management. Background and Objectives: Chinese fir is the most important fast-growing timber species in China, it is also the tree species with the largest trading volume in the stumpage markets of Southern China. The aim of this study was to analyze the determinants and trends of stumpage prices for Chinese fir timber forests. Materials and Methods: Data on 928 sales of Chinese fir timber forests transacted between 2007 and 2016 were gathered from the stumpage markets in Southern China. We analyzed the relationship between stumpage prices and sales characteristics using the hedonic price method (HPM) and measured the stumpage price index with a dummy time hedonic index. Results: (1) The double logarithmic form of the HPM yielded a more accurate estimate than the semi logarithmic form. The R2ad values in the nine annual prediction models were all above 80%. Stock volume made the greatest contribution to stumpage price, followed by stand age. Stand area had no significant impact on the stumpage price. (2) Stumpage prices of Chinese fir timber forests fluctuated greatly, especially in 2010 and 2015 when the sequential price indexes were 180.01% and 74.95%, respectively. Taking 2007 as the baseline, we calculated the base price index in 2016 to be 197%, with an average annual growth rate of 7.82%. (3) The stumpage market was associated with a higher degree of risk than the timber market. Conclusions: Our findings provide valuable inputs that can guide and facilitate the Chinese government’s efforts to optimize resource allocation and standardize the stumpage market.