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Supply equations for sawlog and pulpwood were developed with a panel of data from 102 Norwegian municipalities, observed from 1980 to 2000. Static and dynamic models were estimated by cross-section, time-series andpanel data methods. A static model estimated by first differencing gavethe best overall results in terms of theoretical expectations, pattern ofresiduals, prediction accuracy and parsimony. The results showed thatsawlog supply responded positively to its own price (elasticity e = 0.91 ± 0.07) but negatively to the pulpwood price (e = −0.22 ± 0.06). The pulpwood supply responded positively to the price of both pulpwood (e = 0.53 ± 0.06) and sawlogs (e = 0.20 ± 0.07). Sawlog and pulpwood supply had a common elasticity of 2.04 (± 0.25) with respect to the growing stock, and of 0.30 (± 0.21) with respect to the interest rate. The supply elasticity of substitution of sawlog for pulpwood with respect to their relative price was 0.74 ± 0.04. Policies to raise the annual harvest, which is currently well...

Cost minimization theory suggests national demand equations for paper and paperboard in which demand is a negative function of the price of paper and paperboard, and a positive function of gross national product. A dynamic version of this model was estimated with data from European Union countries, for newsprint, printing and writing paper, and other paper and paperboard. Country-by-country equations proved unstable. Pooling the data across countries, with dummy variables to account for fixed country effects, led to well defined short-term and long-term elasticities with respect to price and gross national product. The hypothesis that income and price elasticities were the same across the European Union countries could not be rejected at the 1% significance level, for the three product groups. From 1969 to 1995, most of the growth in demand had been due to the growth in national product, while price increases had only a small negative effect.

An explanation was sought of the different growth of the paper and paperboard industries in regions of the United States. To that end, a theory of regional demand and supply was formulated. Elasticities of regional production with respect to important supply and demand factors were then calculated by econometric methods, with data for the period 1950–78. These elasticities were used, together with the observed average annual percentage changes of the corresponding variables, to determine the contribution each had on the growth of production. The results indicated that demand was the major factor causing the differences in growth rates. The rapid growth of paper and paperboard production in the regions of the South and West was spurred mostly by high economic and demographic growth in their market area. Supply (cost) factors, and the price of paper substitutes, were found to have played a minor role in comparison.

The purpose of this study was to develop a model of investment behaviour in manufacturing industiries to discriminate the effect and that of the cost of capital. Starting from the neoclasical framework this model relaxed the assumption of contrast cost of capital and improved the description of effect of taxes. It also replaced the traditional partial adjustments process by an improved model of expecttations. The model was tested on the paper industry, It explained well investment,capacity,and prices from 1964–83,and less well the financing of investments.Simualtions using the model showed that demand shifts were the most important determinants of investment in the paper industry.