Potential Changes to Louisiana Hardwood Timber Industry Economic Contributions following Emerald Ash Borer (EAB) Invasion: An Input-Output Approach

Abstract

The emerald ash borer (EAB) Agrilus planipennis (Fairmaire, Coleoptera: Buprestidae) will have untold impacts on the contributions hardwood timber products provide Louisiana's economy. We modeled a scenario where ash mortality was assumed to follow a PERT-Beta distribution to kill essentially all Louisiana ash within 25 yr. Future ash mortality volumes were discounted to the present and valued using market prices to estimate a present effect on timber receipts. Assuming the dead timber would have otherwise been typical trees of average quality, stumpage was presently valued at US$1.57 million, with deliveries totaling US$3.48 million. A salvage arrangement using the double declining balance method coupled with a second PERT-Beta distribution centered upon Louisiana's current 2.84% harvest-to-inventory proportion depreciated the timber's value monthly over 1 yr. Following salvage, average stumpage revenue declined -US$1.54 million, mill deliveries fell -US$3.41 million, whereas state timber severance tax collections declined by -US$46,800. The value added and employment direct effects to Louisiana's economy averaged -US$882,400 and -41.6 jobs, respectively. The multiplier effects of these losses emanating from the timber industry resulted in additional declines averaging -US$2.56 million in value added and -45.6 jobs across the state economy on the drop in output of -US$4.51 million. The total economic effects summed to -US$3.44 million in value added and -87.1 jobs on output declines of -US$9.46 million.