Tuesday, July 7, 2009

Market prices for lumber and exportation

When I was at ISNIE, Krister told me that one of the things that we have
to figure out is a way to get local market prices for lumber in the
regression model, to satisfy all the economists. However, when I
mentioned that I was looking for a source of lumber prices to my
interviewees today, things didn't look so good for me getting a single
data source on this type of information:

The dude actually reached into the garbage can, pulled out a crumpled up
sheet of paper, un-crinkled it, and read off a list of prices to me.

I was thinking, though, about the rest of the interview. These guys
told me that by far the biggest market for these products is the US
export market--they were describing how lumber prices went down by more
than a third after the ATP-DEA was canceled (I must have written about
the ATP-DEA before...

If this industry is pretty much driven by the cost of lumber in the
United States, therefore, there shouldn't be that much difference in
prices across municipalities for the stuff. However, these guys
explained to me how the biggest cost--the biggest thing affecting their
profitability (or rather, the profitability of the local communities) is
the cost of transportation, and this too has been impacted with the
rising gas of gasoline (which has actually gone down again here, but
which is still pretty expensive, especially for Bolivians).

Therefore, it might make sense to model the profitability of these firms
by modeling transportation costs. I should be able to do this using
ArcGIS, although I might need to track somebody down in the Geography
department. And I need to find out where the lumber actually goes
before it's shipped to the states, so I can trace the shipping route
effectively.

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