Abstract
First, we identified the issues facing Japan’s forestry industry by analyzing statistical data. Japan’s forestry industry was in crisis. Despite the large increase in capital stock in forestry over the past 40 years, the production value had declined substantially, which deviated from economic common sense. Next, we used the total factor productivity measurement theory developed by the authors to measure the impact of technical progress on changes in the production value of Japan’s forestry products. The results revealed virtually no evidence that technical progress contributed to any increase in production. In addition, to investigate the causes for the decline in the production value, we measured the cardinal utility of domestic forestry by combining the theory developed by the authors with the system-wide approach of the economist H. Theil. This demonstrated that domestic wood (timber) had a poor reputation. This persistently poor reputation was considered to be the reason for the continuing low incentives for increasing production. Finally, we used economic theory to find a unique method to explain ways to increase forestry production in Japan by improving the reputation of domestic wood.
Highlights
The merit of domestic wood is to provide for future generations by creating a sustainable system in the present, which has been overlooked by consumers
A simple questionnaire survey was conducted using the opportunity method, targeting 42 people, including forestry workers and those concerned with the forestry industry from the Hokkaido region, with the aim of measuring whether an increase in utility impacts technical progress
This paper shows that advanced technical progress is not being embodied in Japan’s forestry industry at present
Summary
The market share of domestic wood has declined due to price competition from imported wood, there is a worldwide trend toward local production for local consumption of wood at present Based on this fact, the authors identify problems in Japan’s forestry industry from an economic perspective to gain a new understanding of the merits of domestic wood and propose solutions. We show the impact of the efforts of those concerned with forestry on economic theory From these considerations, we determine that the assessment of domestic wood must improve before we are able to see any further growth of forestry in Japan. This paper concludes by advocating a feedback system that will give producers incentives that embody technical progress, thereby improving the production of domestic wood, as the key is for the government and industry to induce the demand side to ensure good quality of domestic wood
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