Abstract
A short-run translog profit function with three variable outputs, seven variable inputs and a restricted capital input was estimated for Norwegian sawmilling at a five-digit disaggregated industry level, using a panel of 3,025 individual observations of sawmills over the period 19741991. The parameter estimates were used to calculate price elasticities of supply and demand, shadow price elasticities and related measures for capital. Also the short-run elasticity of size and the rate of technical change were calculated. The estimated short-run supply and demand functions differed between regions, probably due to different export and import opportunities. Non-jointness was rejected for inputs and for outputs. Separability tests indicated that some further aggregation could have been possible. There were decreasing returns to size and negative technical change for the average sawmill in the short run.KeywordsPrice elasticitieselasticity of sizenon-jointnessseparability testing
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