Specific Objectives of the Project
(1) Estimate own-price demand elasticities for wood products and cross-price demand elasticities for wood alternatives in a structural model using instrumental variables.
(2) Quantify effects of increased demand for wood for bioenergy on food production and cropland availability in California, wood harvesting and planting in California, and California’s greenhouse gas emissions.

Project Report/Summary of Results
We gathered and cleaned US region-level consumption data on quantities of intermediate wood products and end-use wood products. We then created a mapping between region-intermediate products and end uses.
We completed literature reviews of (1) papers that empirically estimate wood product elasticities, (2) forestry models and tree production functions, and (3) bioenergy papers modelling the effect of wood bioenergy use on food production and cropland availability, wood harvesting and planting, and greenhouse gas emissions.
We estimated own-price demand elasticities for wood products and cross-price demand elasticities for wood alternatives in a structural model using instrumental variables. We estimate the own-price elasticity of demand for roundwood is between -.5 and -.8. We estimate the own-price elasticity of demand for cement is -0.15.