Advanced Search
MyIDEAS: Login

Estimating price and income elasticities of demand for forest products: Cluster analysis used as a tool in grouping

Contents:

Author Info

  • Michinaka, Tetsuya
  • Tachibana, Satoshi
  • Turner, James A.
Registered author(s):

    Abstract

    Well-estimated elasticities of demand are important for making long-run projections in demand for forest products. In this research, cluster analysis is used to group 180 countries contained within the Global Forest Products Model (GFPM), using cross-sectional data for per capita gross domestic product (GDP), forest coverage, and per capita consumption of forest products, for forest products including plywood, particleboard, fiberboard, newsprint, printing and writing paper, and other paper and paperboard. The application of cluster analysis prior to estimating the elasticities of demand solves the problem of data availability in estimating elasticities by grouping countries based on variables identified from economics theory and enabling the extension of elasticity estimates to countries that are similar to others in a cluster, but without data for directly estimating elasticties. Mean absolute deviation is used for data standardization, and the k-medoids approach and silhouette technique are used in cluster analysis. Statistics of clusters for every forest product show various combinations of countries with similar levels of per capita GDP, forest coverage, and consumption, such as a cluster with high per capita GDP, low forest coverage, and high consumption of the discussed forest product. The results of the cluster analysis are validated by a one-way analysis of means and multiple comparisons. Countries for panel analysis are selected based on time series data availability and quality. As implied by cluster analysis, some of the countries in the cluster can be used to represent the whole cluster. In this research, long-run static models, short-run dynamic models, and long-run dynamic models of demand are estimated using panel data analysis for countries in each cluster using data from 1992 to 2007 and 9 to 44 countries in each cluster. We found that long-run dynamic elasticities are higher than short-run dynamic estimations, and dynamic model estimations outperform static model estimations as shown in RMSE statistics.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.sciencedirect.com/science/article/pii/S1389934111000797
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Elsevier in its journal Forest Policy and Economics.

    Volume (Year): 13 (2011)
    Issue (Month): 6 (July)
    Pages: 435-445

    as in new window
    Handle: RePEc:eee:forpol:v:13:y:2011:i:6:p:435-445

    Contact details of provider:
    Web page: http://www.elsevier.com/locate/forpol

    Related research

    Keywords: Cluster analysis Elasticity of demand Static model Dynamic model Forest products;

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Sorda, Giovanni & Madlener, Reinhard, 2012. "Cost-Effectiveness of Lignocellulose Biorefineries and their Impact on the Deciduous Wood Markets in Germany," FCN Working Papers 8/2012, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:eee:forpol:v:13:y:2011:i:6:p:435-445. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.