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Analysis Of Production Structure Of The Canadian Pulp And Paper Industry : 1961-1996

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  • Habteyonas, Michael

Abstract

A translog cost function with factor inputs of capital, labor, energy and materials was estimated for the Canadian pulp and paper industry over the period of 1961 to 1996. The results show that, the production technology can not be specified by a Cobb-Douglas production function and it is not Hicks- neutral. It was found out that, the industry is characterized by labor-saving and capital, energy and materials-using technical change. The estimated production function indicated the existence of economies of scale, although the size of the scale is not as large as those estimated for the European Union and the United States pulp and paper industries. Estimates for Allen's elasticities of substitution show that, all the factor inputs were found to be highly substitutable among each other. In addition, estimates for price elasticities were found to be sensitive to a change in their own price and relatively speaking, the demand for capital was found to be more responsive to changes in prices of energy and materials and the demand for materials was also found to be sensitive to changes in price of labor and energy.

Suggested Citation

  • Habteyonas, Michael, 2004. "Analysis Of Production Structure Of The Canadian Pulp And Paper Industry : 1961-1996," 2004 Annual meeting, August 1-4, Denver, CO 19939, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea04:19939
    DOI: 10.22004/ag.econ.19939
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    1. Binswanger, Hans P, 1974. "The Measurement of Technical Change Biases with Many Factors of Production," American Economic Review, American Economic Association, vol. 64(6), pages 964-976, December.
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