An economic analysis of mountain pine beetle impacts in a global context

It is noteworthy that cost increase in the lumber market is more than the price increase in the log market, since the lumber supply curve shifts upward by ∆px/f ′(x). [...] The actual increase in the price of logs depends on the log supply and demand elasticities. [...] In the remainder of the paper, we use a multiple-region, global and dynamic trade model to examine the economic impact of the projected B. C. timber shortage. [...] As a measure of total surplus, we use total consumer benefits minus the cost of production in both the timber and lumber sectors of the industry. [...] For each region there is a row for exports and a column for imports; for example, the (2, 3) element of X is log exports from region 2 to region 3. The domestic supply in each region is given by the (r, r) element on the diagonal of the appropriate matrix.