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Assessing the inflation hedging ability of timberland assets in the United States

Publication ,  Journal Article
Wan, Y; Mei, B; Clutter, ML; Siry, JP
Published in: Forest Science
February 1, 2013

Inflation hedging is one of the unique features of timberland assets that attract timberland investors. This study uses Fisher hypothesis and capital asset pricing model under inflation to analyze how effectively private- and public-equity timberland assets hedge actual, expected, and unexpected inflation in the United States over 1987 to 2009. Rolling regression is used to evaluate whether timberland assets can persistently hedge inflation, whereas the state space model is used to examine the time-varying inflation hedging ability. Empirical results suggest that private-equity timberland assets do hedge actual, expected, and unexpected inflation, whereas public-equity timberland assets are not consistent in hedging actual, expected, or unexpected inflation. Hedging effectiveness depends on the state of the economy. We find that private-equity timberland assets are effective in hedging inflation during the boom and less effective during the recession. Investment horizon also plays a significant role in timberland inflation hedging. The longer people invest in the private-equity timberland assets, the stronger and more consistent the hedging ability holds. © 2013 by the Society of American Foresters.

Duke Scholars

Published In

Forest Science

DOI

ISSN

0015-749X

Publication Date

February 1, 2013

Volume

59

Issue

1

Start / End Page

93 / 104

Related Subject Headings

  • Forestry
  • 0705 Forestry Sciences
 

Citation

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MLA
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Wan, Y., Mei, B., Clutter, M. L., & Siry, J. P. (2013). Assessing the inflation hedging ability of timberland assets in the United States. Forest Science, 59(1), 93–104. https://doi.org/10.5849/forsci.11-029
Wan, Y., B. Mei, M. L. Clutter, and J. P. Siry. “Assessing the inflation hedging ability of timberland assets in the United States.” Forest Science 59, no. 1 (February 1, 2013): 93–104. https://doi.org/10.5849/forsci.11-029.
Wan Y, Mei B, Clutter ML, Siry JP. Assessing the inflation hedging ability of timberland assets in the United States. Forest Science. 2013 Feb 1;59(1):93–104.
Wan, Y., et al. “Assessing the inflation hedging ability of timberland assets in the United States.” Forest Science, vol. 59, no. 1, Feb. 2013, pp. 93–104. Scopus, doi:10.5849/forsci.11-029.
Wan Y, Mei B, Clutter ML, Siry JP. Assessing the inflation hedging ability of timberland assets in the United States. Forest Science. 2013 Feb 1;59(1):93–104.

Published In

Forest Science

DOI

ISSN

0015-749X

Publication Date

February 1, 2013

Volume

59

Issue

1

Start / End Page

93 / 104

Related Subject Headings

  • Forestry
  • 0705 Forestry Sciences