The Behaviour of Timber Rents in Sweden 1909–1990

Optimal stopping rules for timber harvesting depend on the nature of the price process. This paper examines two measures of the annual unit timber rent in Sweden; stumpage prices from 1909-1990, and unit net conversion value from 1920-1989. Allowing a postwar shift in the price level, the unitroot conjecture is rejected in a Perron test. This implies that reservation price rules can be implemented.