Study on the Asymmetry of Information on Timber Transactions in the Nishikawa Forestry Area

Abstract

This research aimed to determine what information is possessed and needed by, and to clarify asymmetry in transaction information among, economic agents constituting domestically harvested sawtimber distribution. The research site was the Nishikawa forestry area in the Kanto region and included key economic agents. Results were as follows: (1) Forest owners and loggers have a deep understanding of suitable stumpage area for harvest and of quality control for sawtimber, whereas knowledge of harvesting and transfer process controls for sawtimber by loggers is insufficient in regard to the needs of sawmills and pre-cut timber mills. This knowledge gap prevents the sustainable production of wood products with domestically harvested sawtimber by sawmills and pre-cut timber mills. (2) While sales of wood products by pre-cut timber mills are growing, the sawmills do not purchase sawtimber directly from forest owners and loggers. One reason for not trading sawtimber directly is resistance to direct price negotiations between forest owners/loggers and sawmills. In traditional sawtimber distribution, sawtimber auction organizations have built trust based on information aggregation and long-term business relationships. The problem of information asymmetry may be resolved by adding the role of coordinator of sawtimber suppliers and vendors to the current functions of auction organizations.