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The sawmill industry of the Lake States: a study of productivity, technological change, and factor demand

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A translog variable cost function of the sawmill industry in Michigan, Minnesota, and Wisconsin was estimated using pooled time-series data for the period 1963–1996 with inputs labour, materials, and capital. The estimated model imposed Hicks-neutral technical change and allowed for nonconstant returns to scale as well as nonunitary elasticities of substitution amongst the inputs. Results for the Allen–Uzawa partial elasticity of substitution and the Morishima elasticity of substitution indicate that the three inputs were inelastic substitutes. The own-price elasticities of demand and the cross-price elasticities were all inelastic. The industry exhibits increasing returns to scale and positive technical change. Total factor productivity was increasing by 0.69%/year over the study period.

Une fonction de coûts variables de type translog pour l'industrie du sciage du Michigan, du Minnesota et du Wisconsin a été estimée. Des séries chronologiques combinées, couvrant la période de 1963 à 1996 et incluant comme facteurs de production la main-d'œuvre, le matériel et le capital, ont été utilisées pour cette estimation. Le modèle estimé imposait un progrès technique neutre au sens de Hicks et permettait des rendements d'échelle non constants ainsi que des élasticités de substitution non unitaires parmi les intrants. Les résultats pour l'élasticité partielle de substitution d'Allen–Uzawa et l'élasticité de substitution de Morishima indiquent que les trois intrants sont des substituts inélastiques. Les élasticités-prix de la demande des facteurs et les élasticités-prix croisées sont toutes inélastiques. L'industrie présente un rendement d'échelle croissant et un progrès technique positif. La productivité globale des facteurs de production était en croissance de 0,69 % par année au cours de la période d'étude.[Traduit par la Rédaction]

Document Type: Research Article

Publication date: 2006-10-01

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