Wood quality and the input and output choices of sawmilling producers for the British Columbia coast and the United States Pacific Northwest, west side

Abstract

A transcendental logarithmic restricted profit function is used to represent the structure of the sawmilling industry. Lumber and pulp chips are treated as separate outputs and a measure of wood quality is developed and incorporated in the model in a novel way. Data for the British Columbia coast and the United States Pacific Northwest, west side (1957–1982) are used to estimate the model. Wood quality is shown to be an important variable in lumber industry modelling. The hypothesis of zero technical progress is rejected for both regions. The output mix is shown to be very responsive to changes in wood quality and relative prices.