Local economic impacts of changes in the availability of public timber Public Deposited

http://ir.library.oregonstate.edu/concern/graduate_thesis_or_dissertations/ng451m53n

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  • For many resource-based communities throughout Oregon the timber industry plays an important role. In many of these areas, federal land holdings comprise a large proportion of the area's land holdings. Management decisions regarding resource use on the National Forest lands can have a major influence on the stability of local timber industries and on the communities of which they are a part. Input-output analysis has been used extensively to evaluate the importance of the timber industry to relatively small resource-dependent communities. In the past, the conventional input-output demand model has been used to assess the local impacts of changes in the availability of public timber resources. However, an analysis which interprets a change in primary resource supply as a change in final demand for the processing industry's output may incorrectly evaluate the impacts of shifts in primary resource supply on the local economy. The regional economic impacts resulting from a change in available primary inputs can be estimated more accurately using a modified approach to the conventional method of demand-pull analysis. Because of the network of forward linkages present within the regional economy, a change in primary inputs available to one sector may have a direct or indirect affect on all other sectors of the local economy. These supply-induced impacts on total sales can be calculated using an input-output supply model. The resulting change in total sales can be factored into two components--sales to local industries and sales to final demand. Regional impacts resulting from the first component can be calculated directly from the supply model. A modified version of the input-output demand model can be used to estimate the regional impacts associated with the supply-induced change in the value of local industry exports. This study identifies and evaluates the forward linkage structure present in small resource-based economies. The conventional input-output demand model is modified so that the local impacts of changes in primary resource supply can be evaluated vis-a-vis these structural relationships. A comparative economic impact analysis of three eastern Oregon counties is conducted using the modified input-output methodology. The results obtained using this procedure are compared to results obtained using the conventional method of analysis where changes in primary resource supply are extrapolated to reflect changes in final demand. In each county, estimates of regional impacts obtained using the modified input-output methodology differed from those calculated using the traditional form of analysis. The difference between the estimates was most significant in Morrow County where a relatively larger percentage of output in the wood products industry is sold locally. The demand-induced impacts in each county were considerably larger than the supply-induced changes. Although the initial shock to the system is supply-induced, the backward linkage structure plays a significant role in determining the overall impact of the stimulus on regional and sectoral output. The supply model is able to account for the direct and indirect impacts on regional sales transactions caused by a change in available primary inputs. The input-output demand model, by itself, is unable to account for these transactions. Because the modified input-output methodology provides a means by which changes in scarce primary factor supply can be apportioned into supply and demand related components, a better understanding of the regional economic impacts associated with changes in the availability of public timber can be obtained.
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