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The use of regional economic techniques to analyze forest policy impacts : the case of the impact of close utilization policy on the level of employment within the Kamloops region Ottens, Johannes

Abstract

A technique for estimating the impact of a change in forest policy upon the future level of employment within a region is developed and assessed. The theory, methodology, and relative merits of economic base studies, input-output analysis and simulation modelling are discussed as suitable alternative techniques for impact analysis. The economic base study used in conjunction with location quotients is used in this investigation owing to time and data restrictions. The benchmark, economy is British Columbia. The study region, which is located within the Kamloops Forest District, has been defined in terms of data collection units, trade and functions, and timber flows. The calculated value of the employment multiplier is 3.05. This overstates the true value of the regional multiplier due to the product mix problem, incomplete external trade data for both the benchmark economy and the study region, and failure to account for indirect exports of the benchmark economy. The policy studied is the close utilization policy which was officially implemented on January 1, 1966. The definition, method of implementation and purpose of this policy are discussed. The impact of the close utilization policy on the structure and employment of the regions forest industry in 1971 and in 1980 are estimated. Using the calculated employment multiplier, the total impact of the policy is estimated. In 1971, there were fewer jobs in the study region than there might have been if the close utilization policy had not been implemented. It is predicted that, by about 1980, without the close utilization policy, changes in forest industry structure and market demands which would have resulted from economic forces alone would have led to the same levels of annual harvests, tree sizes harvested, average productivity and average sawmill capacity as had been achieved earlier by implementing the policy. Suggestions are given for improving the accuracy and precision of estimates of future timber harvests, and productivity in logging and sawmilling. Public agencies should include estimates of the impact on employment of their proposed policies and investments in their benefit-cost analyses.

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