Research Needs

The synthesis of hurricanes impacts on forest land owners concludes with a discussion of the research needed to further advance our understanding of these impacts and to identify alternative strategies for coping with these storms. This assessment reveals a long list of potential research needs. A primary need in all timber market assessments of hurricanes is up-to-date and precise information on green timber supply, salvage supply, and demand function parameters. Results for Hurricane Hugo depend critically on assumed market sensitivities, and conclusions about the ultimate economic (especially welfare) impacts of other events depend on similar assumptions that need to be evaluated. Published salvage studies (starting with Holmes 1991), make assumptions about the perfect inelasticity of the salvage supply function. This function is unlikely to be perfectly inelastic (unresponsive to prices). Although sensitivity analysis is useful for establishing plausible bounds on potential economic impacts, up-to-date studies of southern pine supply and demand functions would reduce the need for making assumptions regarding market conditions. Additionally, new studies are needed to identify how hurricanes affect markets for products other than southern pine. A large component of total timber impact results from damages to hardwoods, yet hardwood markets are notoriously under-researched. Such studies could reveal not only the hardwood market economic impacts but also potentially identify new and innovative strategies that owners of hardwoods could apply before and after hurricanes and other catastrophic events.

Timber salvage is a means of recovering value following such storms, yet little is known about how various factors affect the size of the timber salvage discount, particularly how it varies over time and among species. Such studies could provide valuable information regarding optimal salvage strategies following major hurricanes. Our economic calculations—and, hence, recommended salvage strategies—could be improved and changed with better information on this segment of the post-hurricane timber market.

Other analysts in this encyclopedia provide evaluations of the timber management consequences of holding timber assets that are subject to large-scale natural disturbances. However, research to date has not addressed whether long-term price enhancements emanating from a hurricane or other large natural disturbance can generate expected profits that are, in aggregate, greater than those expected in regions without such events. Timber losses occur in a subset of the timber market—consumers and damaged producers—but the gains could be significant for some landowners. Identifying the circumstances under which timberland owners gain, in aggregate, from these storms is an area worthy of further study.