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Forecasting Adoption and Substitution of Successive Generations of Structural Wood Panel Products in the United States

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Abstract:

A sizable body of literature concerned with technological substitution modeling exists within the domain of forest products. These models have generally been used to develop market share forecasts for various forest products and their substitutes based on relative product prices. Substitution models usually assume that the potential market size is known and that products can freely substitute for one another. A small but growing literature concerned with the diffusion of innovations also exists within the domain of forest products. This diffusion literature typically focuses on factors affecting consumer acceptance for product innovations and forecasting the level of demand growth without constraining the potential market size. In this paper, we examine the dynamic sales behavior of three and four successive generations of structural wood panel products using varying forms of a multigeneration diffusion model. The multigeneration diffusion model introduced here, which encompasses the elements of diffusion and substitution modeling, assumes that a new structural wood panel product will diffuse through a population of potential consumers over time and that market share competition will be introduced with successive generations of structural wood panels. It is important to note that our results are contingent upon the use of domestic production data, which is used as a proxy for domestic consumption. In other words, our results do not factor in net imports. Estimation results indicate that market share competition between various structural wood panel products are differentially impacted by substitution and diffusion effects. We explore the managerial implications of the model results and suggest alternative multigeneration diffusion models that could be developed for structural wood panel products. For. Sci. 45(2):232-248.

Keywords: Diffusion; industry evolution; oriented strandboard; plywood; waferboard

Document Type: Journal Article

Affiliations: Assistant Professor of Forest Products Marketing, Department of Forest Products, College of Forestry, Wildlife and Range Resources, University of Idaho Moscow, ID 83844-1132--(208) 885-6802;, Fax: (208) 885-6226

Publication date: 1999-05-01

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

    Also published by SAF:
    Journal of Forestry
    Other SAF Publications
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