Socioeconomic development and demand for timber products: a panel data analysis

The present paper analyses the relationship between consumption of timber products and socioeconomic variables by estimating timber consumption functions, using fixed and random effects methods. To this end, we regress the per capita consumption of timber products (roundwoodequivalent) of a sample of developed and developing countries over the period 1976 to 1989 on various national indicators relevant to thedevelopment transition. The panel nature of the data facilitates us to track trends in consumption as economic development proceeds. The results suggest that the response of the timber consumption with respect to changes in the variables is sensitive to factors specific to the country concerned. The coefficients of all the variables are inelastic and it is found that income, density and price are the main determinant variables although other variables also affect the consumption. The observations of this study are expected to assist the policy makers in projecting future requirements of timber with more reliability. [ABSTRACT FROM AUTHOR]