Conjoint analysis of industry location preferences: evidence from the softwood lumber industry in the US

Abstract

Conjoint Analysis (CA) was used to study location preferences among members of the softwood lumber industry in the southern and western regions of the US. This industry was selected as an example of a resource-based industry to test several hypotheses derived from location theory. Decision-makers, owners and managers, identified price of logs and distance to sources for logs as the most important location factors. A secondary category included wages and energy costs. Other variables such as cost of land, quality of access roads and distance to markets are less important. There were statistically significant differences in the part-worth estimates of raw materials and wage costs among decision-makers but not between regions in an ordered model for site preference. Marginal analysis of the price of logs stressed its importance as the major location factor in the softwood lumber industry.

Acknowledgements

Partial support for this research was provided by Resources for the Future in the form of a Joseph L. Fisher Dissertation Fellowship. The author acknowledges helpful suggestions to this manuscript from Dr Richard Vlosky, Dr Charles Grenier and Ms Lisa Mauger. Any errors are the responsibility of the author.