What material can I use for shiplap?
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1/4" plywood ripped to 6" wide
Are you going to paint? If so, make sure the wood does not have knots that are harder to cover. Visit any home improvement store or lumberyard and they will have many options available to fit almost any budget, typically pine being on the lower end of the scale.
Lumberyards sometimes carry real shiplap, that is, 5 or 6" boards that have joining laps already on the edges. Alternatively, I just saw on a segment on TV that they are now making an MDF shiplap that has the look of 2 boards joined, that would cut installation time and is probably cheaper. It is already finished in white. I would look to see if the MDF has a woodgrain for a more traditional look.
Try old barn wood. Or just about any other wood cut to size with less depth
any timber, cut them at a 45% on each joint, slip one under the other