Recipient Organization
TENNESSEE STATE UNIVERSITY
3500 JOHN A. MERRITT BLVD
NASHVILLE,TN 37209
Performing Department
Agricultural and Environmental Sciences
Non Technical Summary
Forest occupies around 766 million acres in the United States which is around 33 percent of the total land area (USDA, Forest Service, 2014). The United States is the world's largest producer of softwood and hardwood lumber and a leading producer and consumer of forest products accounting for around one fourth of the world's production and consumption.Forestry industry comprises a wide range of establishments including the production of lumber, pulpwood, solidwood, paper and non-timber forest products. Geographically, under broad classification of the US forest lands into three regions West, North, and South, the South region contains the highest 40 percent of the total timber land, and also referred as 'woodbasket' of the US (USDA Forest Service, 2014). Among 13 Southern states, Tennessee is one of the important states for hardwood forest and timber.Tennessee's forests cover 14 million acres (52 percent) of the state (TN Department of Agriculture, 2016), majority of which is occupied by hardwood species and timber. Tennessee is the home for around 200 sawmills producing around 800 million board feet of hardwood lumber and 15 million board feet of softwood. Forest and forest products are utilized for variety of products and purpose. Paper manufacturing, furniture, wood products manufacturing, fuel, firewood, biofuel and biomass, recreational purposes are some uses of forest and forest products to name a few. All these uses of the forest and forest products have different degrees of impact on local and state economies. Moreover, the sectors are interconnected mainly through input and output markets.These interconnected effects generate local and state level economic impacts on different sectors. A solid understanding of these economic impacts enables policy makers, forest businesses, and researchers to understand market interactions and response to and from the forestry sector. For example, with additional saw mills and paper mills in the area, it not only has direct effects on the economy through sales and employment but also the spillover effects on many sectors to different degrees. While these indirect effects are important to account for when computing impact, the studies often neglect such indirect effects.This study will document direct, indirect, and induced effects and overall regional economic impact of the forestry sector in Tennessee. The study will use Impact Analysis for Planning (IMPLAN) model and data for the most recent year. Each county and regional level estimations will be generated and aggregated to perform overall impact of the industry.
Animal Health Component
100%
Research Effort Categories
Basic
(N/A)
Applied
100%
Developmental
(N/A)
Goals / Objectives
To Assess an overview of Tennessee's forest resource base and analyze the economic importance and impact of forestry and forest product industry in TennesseeTo understand the interconnection between sectors and their role in local and rural economies such as land, labor and capital markets in specific regions, such as county and congressional districts within the state
Project Methods
Objectives 1 has two components: first component will be completed by reviewing the current status and second by estimating economic impact of forestry and forest product industries in Tennessee. Forestry, forest product manufacturing, and related establishments will be identified based on North American Industrial Classification System (NAICS) codes. For example, sector related to forestry and logging are denoted by 3-digit NAICS code 113, and the subsectors under this are classified to 4-digit and 5-digit levels accordingly; wood Product manufacturing establishments are denoted under NAICS code 321; paper Manufacturing establishments are denoted by NAICS code 322; Furniture and related product manufacturing industries are denoted by NAICS code 337, to name a few. Based on the input-output analysis and social accounting matrix for the sector, total economic impact for overall industry will be estimated. The study will use Impact Analysis for Planning (IMPLAN) model and data for the year 2016. Each county and regional level estimations will be generated and aggregated to perform overall impact of the industry.The base model in IMPLAN premises on a double constrained gravity model used in trade theories. Its social accounting system models the domestic trade flows between regionals and industries using a spatial interaction models. IMPLAN has been used in wide range of applied studies to estimate the sectoral impact: the impact of some special event (Crompton, 1995; Crompton et al., 2001), impact of infrastructure development and projects (Lynch, 2000), impact of tourism sales (Johnson et al., 1989), impact of recreational fisheries (Steinback, 1999) to name a few.IMPLAN utilizes a National Trade Flows model (NTFM) to estimate a new set of regional purchase coefficients and other trade data that predict local purchases based on region's characteristics. Output from the model includes descriptive models of the economy including total industry output, employment, and value added for all the industries in the local and state level economy. To obtain regional impact on different aspects, this study will estimate economic impacts on county-level, congressional district level, and state level. A comparative analysis will be done across county and congressional districts. With additional information from secondary sources and literature, the study will then discuss the potential reason(s) behind the differential impacts.In addition to providing description about regional economy, IMPLAN model also estimates the multipliers for each sectors that can be used for prediction purposes. A multiplier is a fractional number that denotes the magnitude of relationship of a sector with other. With multipliers for each sector, we can find the impact of one sector to the other--how change in some factor in one sector impacts the outcomes of the other. This will provide the interconnection of industry. Objective 2 will be accomplished by estimating this interconnection and cross impacts, analyzing the trend across years in a specific region, and discussing the inter-sectoral relationship.Multipliers measure the response of the economy to a change in demand or production. The response due to this change in economic outputs such as employment, income earned by households, value added from the sector are computed as direct, indirect, and induced impacts. The response of given industry with respect to change occurred in same industry is referred as direct impact. The response by all other local industries as a result of a change in specific industry is referred as indirect impacts. The resulting impacts on all local industries due to rise in household's income from direct and indirect effects are referred as induced impacts.