Communication Media and Demand for Printing and Publishing Papers in the United States
Abstract:To predict the demand for printing and publishing papers, a model was first developed of the demand for printed materials--newspapers, books, magazines, and their substitutes--computers, and televisions and radios. A two-stage Almost Ideal Demand System (AIDS) represented the consumer demand for communication media (stage one) and for printed materials, computers, and televisions and radios (stage two). Annual United States data from 1960 to 1991 were used to estimate the expenditure share equations and related elasticities. The results suggest that during that period: (1) printed materials and computers were luxury goods; (2) the demand for printed materials was independent of the price of computers and slightly complementary of the demand for televisions and radios; and (3) the demand for printed materials was most sensitive to its price and to income. Then, the demand for paper by the printing and publishing industry was derived from a two-stage translog cost minimization model. The first stage describes the demand for paper to make printed materials together with labor, capital, and other materials. The second stage decomposes the demand for paper into that for each printing and publishing grade. Results show that during the period of observation, (1) paper demand was inelastic; (2) labor, capital, and other materials were substitutes for paper in making printed materials; and (3) technical change led to a relative decrease in the use of newsprint, and an increase in that of other paper grades. Equating production of printed materials to consumer demand led to the derived demand for each paper grade. The elasticities suggested that paper demand was not influenced much by the price of electronic media. A decomposition analysis of the growth in demand for printing and publishing papers showed that from 1981 to 1991 the positive income effects were most important, followed by the negative effects of changes in the prices of printed materials. For. Sci. 43(3):362-377.
Document Type: Journal Article
Affiliations: Professor, Department of Forestry, University of Wisconsin-Madison, 1630 Linden Drive, Madison, WI 53706 Phone: (608)262-0091, Fax: (608)262-9922
Publication date: August 1, 1997
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