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The significance of transport costs in the Swedish forest industry

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Author Info
Hammar, Henrik (National Institute of Economic Research)
Lundgren, Tommy () (Department of Forest Economics)
Sjöström, Magnus () (National Institute of Economic Research)

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Abstract

Environmental 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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Publisher Info
Paper provided by National Institute of Economic Research in its series Working Paper with number 97.

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Length: 19 pages
Date of creation: 01 Dec 2006
Date of revision:
Handle: RePEc:hhs:nierwp:0097

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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Related research
Keywords: 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, and Regional Economics - - Transportation Systems - - - Government Pricing; Regulatory Policies

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Lundgren, Tommy & Sjöström, Magnus, 1998. "A Dynamic Factor Demand Model for the Swedish Pulp Industry, 1998," UmeÃ¥ Economic Studies 479, Umeå University, Department of Economics. [Downloadable!]
  2. Lundgren, Tommy & Sjostrom, Magnus, 2001. "A flexible specification of adjustment costs in dynamic factor demand models," Economics Letters, Elsevier, vol. 72(2), pages 145-150, August. [Downloadable!] (restricted)
  3. Lau, Lawrence J., 1976. "A characterization of the normalized restricted profit function," Journal of Economic Theory, Elsevier, vol. 12(1), pages 131-163, February. [Downloadable!] (restricted)
  4. Brannlund, Runar & Lundgren, Tommy, 2004. "A dynamic analysis of interfuel substitution for Swedish heating plants," Energy Economics, Elsevier, vol. 26(6), pages 961-976, November. [Downloadable!] (restricted)
    Other versions:
  5. Lau, Lawrence J, 1972. "Profit Functions of Technologies with Multiple Inputs and Outputs," The Review of Economics and Statistics, MIT Press, vol. 54(3), pages 281-89, August. [Downloadable!] (restricted)
  6. Brännlund, Runar & Lundgren, Tommy, 2005. "Swedish Industry and Kyoto – An Assessment of the Effects of the European CO2 Emission Permit Trading System," UmeÃ¥ Economic Studies 668, Umeå University, Department of Economics. [Downloadable!]
    Other versions:
  7. Peter A. Diamond & J. A. Mirrlees, 1968. "Optimal Taxation and Public Production," Working papers 22, Massachusetts Institute of Technology (MIT), Department of Economics.
  8. Mirrlees, James A, 1971. "An Exploration in the Theory of Optimum Income Taxation," Review of Economic Studies, Blackwell Publishing, vol. 38(114), pages 175-208, April. [Downloadable!] (restricted)
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