Pricing of timber sale lot on forest roadsides: the case study of Azarroud forestry plan, Shirgah, Iran

In Iran, most of experienced foresters are aware of the many factors that influence timber sale prices on roadside. However, there are not quantitative estimates of these factors. In this research, implicit prices of timber lot characteristics were analyzed in Azarroud forestry plan, Shirgah, Iran. To estimate implicit prices, 410 timber sale lots of Azarroud forestry plan in the period 1992 to 2008 were evaluated and incorporated into a dataset. Hedonic Pricing Method (HPM), pooled data multivariable regression analysis of the Eviews 5 software were then used to estimate a model relating transaction price of timber lots to their characteristics. The model explained approximately 86% of the variation in the total sale price using characteristics of timber sale lots and the standard error was around 22875 Rial per m3 (2$ /m3) with average real price of 1027603 Rial per m3 (91$/m3)of lot. Then, the classical hypothesis of pooled least square estimator e.g. residuals normality test were evaluated. ‏The result showed that the pooled least square estimator was usefully applied. As well, the impact of lots characteristics on their sale prices including sale volume per hectare, average diameter of logs in lot, volume ratio of higher price species of group 1 (alder, maple, beech etc.) in lot, number of auction bidders, volume ratio of logs in lots, transport distance to first main road, species homogeneity index (Herfindahl) and side slope were found to be significant (p=1%). Sale volume per hectare and transport distance to main forest roads had the highest positive and negative effects on timber sale lot, respectively.