IDEAS home Printed from https://ideas.repec.org/p/ags/aaea06/21430.html
   My bibliography  Save this paper

Production Structure, Technological Change and Scale Economies in the Saw and Planing Mills Industry in New Brunswick, Canada

Author

Listed:
  • Yigezu, Yigezu A.
  • Foster, Kenneth A.
  • Lantz, Van

Abstract

The translog cost function approach is employed to characterize the production structure and to estimate the rate of technical change and technical bias in the saw and planing mills industry (SPM) in the New Brunswick Province. The findings are that the production structure of the saw and planing mills in Canada is neither homothetic nor homogenous implying potential scale induced distortion in the input mix. Morishma elasticity of substitution estimates show that in the existing technology of the saw and planing mills in New Brunswick, labor can more easily be substituted by capital than capital by labor. Moreover, the amount of round wood that is required to complement labor is higher than that required to complement energy and capital, which indicates that a labor intensive technology choice in the SPM industry is more round wood consuming than the capital and energy intensive technologies. These results coupled with the increasingly stringent environmental regulations indicate that the relative use of labor compared to other inputs is likely to decline in the saw and planing mills industry. Hence, in view of their cost minimizing behavior, the saw and planing mills in New Brunswick will sooner or latter start to replace labor with energy or capital. The saw and planing mills in New Brunswick exhibited fairly high economies of scale during the period 1965-1995, but the rate of technical change has been found to be negative.

Suggested Citation

  • Yigezu, Yigezu A. & Foster, Kenneth A. & Lantz, Van, 2006. "Production Structure, Technological Change and Scale Economies in the Saw and Planing Mills Industry in New Brunswick, Canada," 2006 Annual meeting, July 23-26, Long Beach, CA 21430, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea06:21430
    as

    Download full text from publisher

    File URL: http://ageconsearch.umn.edu/record/21430/files/sp06yi01.pdf
    Download Restriction: no

    More about this item

    Keywords

    Resource /Energy Economics and Policy;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aaea06:21430. 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: (AgEcon Search). General contact details of provider: http://edirc.repec.org/data/aaeaaea.html .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.