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Estimating price taking behavior with mill-level data: the Norwegian sawlog market, 1974-1991

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Abstract:

A five input transcendental logarithmic (translog) cost function and a set of conditional input demand functions, which were extended to include a conjectural elasticity term, were analyzed. The analysis was based on data covering individual Norwegian sawmills over the period 1974–1991. The presence of mill-level data allowed us to test cross-sectional effects as well as intertemporal effects. Under the assumption of cost minimization, price-taking behavior was rejected for the years 1982 and 1984–1991. There was no variation of the conjectural elasticity over regions, but the use of market power increased after the price negotiations were brought from the national to regional levels. The necessity of having information on sawlog purchases and market areas to conclude on welfare effects is explained. This analysis also contributes to explain the post-1992 period, where the Norwegian sawlog market has experienced several structural changes.

Une fonction du coût trans-logarithmique à cinq variables et un groupe de fonctions de la demande à variables conditionnelles, étendues pour inclure un terme d'élasticité conjecturale, ont été analysées. L'analyse repose sur des données provenant de différentes scieries norvégiennes pour la période 1974–1991. La disponibilité de données propres à chaque scierie a permis de vérifier les effets en coupe instantanée aussi bien que les effets dans le temps. Assumant qu'on cherche à minimiser le coût, le comportement de preneur de prix a été rejeté pour les années 1982 et 1984–1991. L'élasticité conjecturale ne variait pas selon les régions mais l'utilisation des tendances du marché a augmenté après que les négociations sur le prix eurent passé du niveau national au niveau régional. La nécessité d'avoir de l'information sur les achats de bois de sciage et les marchés pour être en mesure de tirer une conclusion sur les retombées sociales est expliquée. Cette analyse contribue également à comprendre la période postérieure à 1992, au cours de laquelle le marché norvégien du bois de sciage a connu plusieurs changements structuraux.[Traduit par la Rédaction]

Document Type: Research Article

Publication date: 2002-03-01

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