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A Dynamic Cost and Factor Demand Analysis for the Pacific Northwest Lumber and Plywood Industries

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Abstract:

A dynamic capital adjustment model is used to describe the Pacific Northwest lumber and plywood industries. The industries' derived demand for stumpage, labor, and capital inputs along with the behavior of costs over output levels are assumed dependent on the quasi-fixed nature of industry capital. Results obtained from data over the period 1954-80 suggest that own and cross-price elasticities of derived demand generally increase as the industries adjust towards long-run desired capital levels. Measures of short, intermediate, and long-run input requirement elasticities revealed relatively constant proportions of stumpage requirements to output levels in both industries, relatively constant proportions of labor to output in the plywood industry, yet relatively volatile employment levels in the Pacific Northwest lumber industry over the long run. Further, adjustments in capital levels appear to have had only a limited effect on the behavior of production costs in the two industries. Forest Sci. 32:220-233.

Keywords: Production and cost functions; capital adjustments; derived demand; input substitution; short-run/long-run analysis

Document Type: Journal Article

Affiliations: Associate Professor of Accounting, Western Washington University, Bellingham, WA 98225

Publication date: 1986-03-01

More about this publication?
  • Forest Science is a peer-reviewed journal publishing fundamental and applied research that explores all aspects of natural and social sciences as they apply to the function and management of the forested ecosystems of the world. Topics include silviculture, forest management, biometrics, economics, entomology & pathology, fire & fuels management, forest ecology, genetics & tree improvement, geospatial technologies, harvesting & utilization, landscape ecology, operations research, forest policy, physiology, recreation, social sciences, soils & hydrology, and wildlife management.
    Forest Science is published bimonthly in February, April, June, August, October, and December.

    2015 Impact Factor: 1.702
    Ranking: 16 of 66 in forestry

    Average time from submission to first decision: 62.5 days*
    June 1, 2016 to Feb. 28, 2017

    Also published by SAF:
    Journal of Forestry
    Other SAF Publications
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