The Effect of Forest Certification on Log Sale Prices: A Case Study in Northwestern Turkey

Abstract

Forest certification is a tool contributing to the achievement of sustainable and responsible forest management. It also presents consumers with a market to purchase products coming from responsibly managed forests and provides forest managers with improved market access for their products. Even if forest certification incurs higher costs that affect the sale price, consumers generally have a greater willingness to pay more for certified products than for uncertified products. The objective of this study is to analyze the changes in the sales prices of oak and beech log in auction sales occurring during certified and uncertified periods at Demirköy Forest Enterprise, which received an FSC Certificate in 2014. For this aim, the Chow test was used and linear regression models were developed. It was found that the log sales prices of certified and uncertified periods are statistically different from each other at p = 0.05 significance level. As a consequence, it was determined that there was an increase in price of approximately 12% for oak and 19% for beech at log sales after certification. This study deals with only part of the economic impact of certification. The results can contribute to the forest certification database in order to support the decision-makers (managers and wood manufacturers) in their strategic decisions. The study will enable the forestry sector to see the possible reflections of certification practices in the country and the world markets. The effect of certification should be further investigated by including other factors (supply-demand situation of the forest industry, sales of neighboring enterprises, market conditions, etc.) affecting log sales prices.