Effect of the energy crisis on the elasticities of demand for forest products in OECD countries

Abstract

The purpose of this paper was to test if there had been systematic changes in the income and price elasticities of demand for forest products after the first oil embargo of 1973. The test used pooled data from 10 OECD (Organization for Economic Cooperation and Development) countries between 1961 and 1981. Eight commodity groups were considered: coniferous sawn wood, nonconiferous sawn wood, plywood, particleboard, fibreboard, newsprint, other printing and writing paper, and other paper and paperboard. The demand models used were distributed lags on first logarithmic differences of income and price in each country and year. The hypothesis that the long-term elasticities of demand with respect to gross domestic product were the same from 1963 to 1981 as from 1974 to 1981 was rejected for coniferous sawn wood and printing and writing paper. Long-term price elasticities had also changed for the same commodities. A negative trend in the demand of coniferous sawn wood and particleboard, independent of prices or gross domestic product, appeared to have set in after 1973.