The evolution of forest sector models in the United States from simple Malthusian concepts of catastrophic scarcity to integrated planning models has been guided by (and in response to) changing policy contexts. This evolution is described both in terms of changing model forms and changes in the projections of future market prospects for forest products. In addition, variations of forest sector models have been used in the last 15 years to look at increasing environmental regulation on timber production in the United States. Three issues are examined : the economic impacts of reductions in National Forest harvest, the economic consequences of environmental regulations on private timberland, and the impact of a log export ban on lumber production in the Pacific Northwest.
An understanding of market conditions and market dynamics is necessary in order to choose, implement, and evaluate marketrelated policy instruments such as certification of forest management practices and labelling of forest products. A review of world patterns of timber production and trade illustrates the relative importance of production of industrial timber in tropical forests, and recent trends in tropical timber markets. In order to accurately gauge market response to price and other factors affecting demand, models of forest products demand must incorporate information on prices of substitutes. The example of United States consumption and import of hardwood plywood is used to illustrate an approach to modeling that can contribute to analysis of policy issues for tropical timber.