Supply Consequences of Subsidizing Thinning Activities in Sweden

This paper is an attempt to measure the supply consequences of the thinning subsidy which was in operation during the cutting season 1979/80. The econometric analyses are based on a questionnaire to a sample of 2500 private non-industrial forest owners, which was produced by the official Swedish investigation SOU 1981: 81. The analyses show that it is questionable whether the subsidy did affect the total cut. The estimates of the supply increase range from an average of zero to 122 m(3)/owner. As a by-product we obtain estimates of the price elasticity of the private non-industrial forest owners supply curve. These estimates range from 0.63 to 1.69.