Estimating the Effects of Covid-19 and Softwood Lumber Prices Available to Purchase

During the Covid-19 pandemic, markets observed unprecedented changes in U.S. and Canadian softwood lumber prices and their volatility. In this paper, we employ an event-based model to estimate the impact of Covid-19 on the prices of softwood lumber, utilizing a Regression Discontinuity design model to investigate the potential causal effect of Covid-19 on softwood lumber prices. Our econometric analyses serve to provide evidence that softwood lumber price increases during the pandemic were not completely random but could instead be attributed in part to variations in recent global and regional events. Our research highlights the need for the adoption of robust and adaptable strategies and provision of information important for risk assessment and decision-making in industries that rely on softwood lumber inputs.