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The Effects of Internet Use on Global Demand for Paper Products

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In recent decades, the Internet, together with information and communication technologies such as personal computers and cellular phones, has provided an electronic alternative to newspapers and printed materials. We examine how Internet adoption has affected worldwide demand for newsprint and printing and writing papers. We find that the Internet has reduced demand for newsprint in all regions. These regions include the United States, the Organization for Economic Co-operation and Development (OECD) countries other than the United States, the countries of the former Soviet Union (Reform), the Asian countries not in the OECD (Asia), and developing countries in Africa and Latin America. The effect is strongest in the United States, where we predict that as of 2011 newsprint consumption would have been 4 times higher in the absence of the Internet. The effects on printing and writing papers are more varied. The Internet is found to have reduced consumption in the United States and OECD countries, had a negligible effect in Asia and the Reform region, and increased consumption in Africa and Latin America. By accounting for Internet adoption, our new demand estimates have the potential to improve forecasts of paper consumption contained in forest outlook studies.

Management and Policy Implications Effective forest policy and management decisionmaking requires both insight into the potential aggregate impacts and sensitivity to changes in future resource and market stimuli. Good decisions therefore necessitate incorporation of the latest resource, regulatory, and market conditions. In this study, we evaluate data representing global newsprint and printing and writing paper demand and juxtapose trends in gross domestic product (GDP) and Internet adoption for five global regions over the years 1970‐2011. We note a structural change in the paper market as people have embraced electronic alternatives to newspapers and printed materials. We then estimate sensitivity parameters of paper demand to changes in GDP and Internet adoption and demonstrate how not accounting for this interaction can lead to misrepresentation of paper demand and thus unreliable management or policy expectations.
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Keywords: Internet; forest products markets; newsprint; printing and writing paper; substitution

Document Type: Research Article

Publication date: July 1, 2016

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