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The Demand For Domestically Produced Sawn Timber: An Application Of The Diewert Cost Function

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  • Doran, Howard E.
  • Williams, David F.

Abstract

The Australian demand for domestically-produced sawn timber is investigated by considering its major use - as an input into residential construction. Using a cost function approach, a system of equations is derived expressing quantities demanded in terms of relative prices. Cross-price elasticities are estimated and the falling input-output ratio of timber in residential construction is analysed by decomposing the change in this ratio into price, outputs and taste/technology effects. A major finding is that, while substitution of timber for other inputs has been encouraged through relative price movements, this effect has been more than offset by taste and technology trends away from timber usage.

Suggested Citation

  • Doran, Howard E. & Williams, David F., 1982. "The Demand For Domestically Produced Sawn Timber: An Application Of The Diewert Cost Function," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 26(2), pages 1-20, August.
    • Handle: RePEc:ags:ajaeau:22608
    DOI: 10.22004/ag.econ.22608
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    References listed on IDEAS

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    1. Woodland, A D, 1975. "Substitution of Structures, Equipment and Labor in Canadian Production," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 16(1), pages 171-187, February.
    2. Milton Friedman, 1962. "The Interpolation of Time Series by Related Series," NBER Books, National Bureau of Economic Research, Inc, number frie62-1.
    3. Diewert, W E, 1971. "An Application of the Shephard Duality Theorem: A Generalized Leontief Production Function," Journal of Political Economy, University of Chicago Press, vol. 79(3), pages 481-507, May-June.
    4. Ian S. Ferguson, 1973. "Forecasting The Future For Timber," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 17(3), pages 159-169, December.
    5. Parks, Richard W, 1971. "Price Responsiveness of Factor Utilization in Swedish Manufacturing, 1870-1950," The Review of Economics and Statistics, MIT Press, vol. 53(2), pages 129-139, May.
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    Cited by:

    1. Kivanda, Lena & Fox, Glenn, 1993. "Falsification and the Practice of Agricultural Production Economists: A Methodological Assessment," Department of Agricultural Economics and Business 258724, University of Guelph.
    2. Paul, Phillip B. & Sar, N.L. & Bui-Lan, Anh, 1989. "Forecasting Sawntimber Consumption: The Application Of An End-Use Model," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 33(3), pages 1-14, December.

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