A Spatial Panel Data Analysis of Tree Planting in the US South

Abstract

Abstract This study used panel data models with spatial error correlation to analyze private tree planting in the US South from 1955 to 2003. Controlling for statewide, fixed effects allows us to disentangle the effect of spatial interaction from that of state heterogeneity and omitted variables. The results show that there is significant spatial interdependence among the southern states in private tree planting. Harvest rates, softwood sawtimber price, income levels, cost of capital, and federal and state cost-share programs are important factors affecting nonindustrial private (nonindustrial private forestland [NIPF]) tree planting. Harvest rates, softwood sawtimber and pulpwood prices, and planting cost are important factors affecting forest industry (FI) tree planting. Finally, the Soil Bank Program has had substitution effects on southern FI tree planting and nonsubsidized NIPF tree planting.