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UBC Theses and Dissertations

A regional analysis of supply in the Canadian pulp and paper sector Klein, Stephen Richard


The purpose of this thesis was to analyse the supply of pulp and paper products in the three major producing provinces of Canada, namely British Columbia, Ontario and Quebec. A translog restricted profit function and its first partial derivatives were estimated using the iterative seemingly unrelated regressions procedure. Derived demand equations for energy, fibre, labour and supply equations for net market pulp, newsprint and 'other paper and paperboard", (net market pulp and 'all paper and paperboard' for British Columbia) were obtained with net supplies as a function of each input and output price. The success of the model in representing the industry was mixed. Derived demand own price elasticities were, in almost all cases, negative as expected a priori. Negative own price elasticities were also found in many end product supply functions suggesting a misspecification of the supply relationship. The unexpected supply function results bring up questions about the degree of competitiveness in pulp and paper markets, and thus the validity of using the perfectly competitive market assumption in empirical studies. Finally the model was evaluated in the context of using the results in a spatial equilibrium model of the North American pulp and paper sector.

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