Effects of econometric and activity analysis derived supply curves on Canadian sawmilling industry market forecasts

Graduation date: 2000This study utilizes the Timber Assessment Market Model (TAMM) to examine the\ud differences in Canadian softwood lumber market forecasts arising from econometric\ud versus activity analysis supply curves. A restricted profit function approach is applied to\ud three lumber producing regions using the most recent data available on costs, prices, and\ud output to estimate the econometric supply curve along with factor demands. The\ud corresponding own- and cross-price elasticities along with the elasticities of substitution\ud are estimated and compared to past studies. An activity analysis supply curve is\ud presented utilizing two production technologies. Market forecasts for the period 1996-\ud 2005 are estimated via the TAMM model. A comparison of TAMM solutions for a base\ud case and three exogenous shock scenarios is presented. Similar price and quantity values\ud are obtained in the historic period, while the activity analysis provide a much more\ud volatile reaction to exogenous stimuli