The significance of transport costs in the Swedish forest industry
AbstractEnvironmental and transport policies based on marginal external costs, such as a kilometer tax for heavy goods vehicles, can be constrained by the risk of industries incurring higher production costs than competi-tors in other countries. However, the significance and size of this cost is largely an empirical question. We estimate factor demand elasticities in the wood and the pulp and paper industries using firm level data for the 1990-2001 period on input prices and quantities. The results show that the introduction of a kilometer tax for heavy goods vehicles affects transport demand as well as other factor demands and output, but that the ef-fects are less pronounced in terms of changes in output. In the wood industry, production decreases by be-tween 0.6 % and 3.0 %. The corresponding decrease in the pulp and paper industry is between 0.4 % and 1.3 %. The effects on average profits are small in both industries.
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Bibliographic InfoPaper provided by National Institute of Economic Research in its series Working Paper with number 97.
Length: 19 pages
Date of creation: 01 Dec 2006
Date of revision:
Note: Hammar, H. Lundgren, T. & Sjöström, M. (2008) “The significance of road transport costs in Swedish forest industry” is published in Journal of Transport Economics and Policy, 42(1): 83–104
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More information through EDIRC
elasticity; factor demand; kilometer tax; forest industry; transport policy; environmental policy;
Find related papers by JEL classification:
- D20 - Microeconomics - - Production and Organizations - - - General
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-01-23 (All new papers)
- NEP-ENV-2007-01-23 (Environmental Economics)
- NEP-PBE-2007-01-23 (Public Economics)
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