Citation
Mais, Kinus
(1992)
Econometric Analysis of Supply and Demand for Log and Sawn Timber in Sabah.
Masters thesis, Universiti Pertanian Malaysia.
Abstract
This study investigates the main factors affecting
supply and demand of log and sawn timber of Sabah. The
partial adjustment and adaptive expectation (PAAE)
frameworks for log and sawn timber were developed and
estimated using time series data.
The regression results and simulation tests indicate
that the estimated models are satisfactory. All the
significant coefficients have the correct signs. The Root
Mean Square Percentage Error (RMSPE) and Theil inequality
Coefficient values of the estimated models are low.
The finding sindicate that the long run supply
elasticity value with respect to logged area is low (0.19). On the contrary the factors influencing domestic
demand for log are elastic. The long run domestic demand
elasticity value with respect to domestic price and construct ion activities are -1.23 and 2.43 respectively.
In the world market, log export demand is influenced by
export price and construct ion activities of industrial
countries. The long run export demand elasticity value
with respect to export price and industrial construct ion
activities are (-7.61) and (3.34) respectively.
In the sawn timber market, the long run supply
elasticity value with respect to domestic price, log input
price,saw milling recovery rate and dummy variable for
government incentives are 5.23, -0.79, 0.64, and 0.5 1
respectively. On the domestic demand side, only the
construction activity is found to have an influence o n the
quantity demanded. The long run domestic demand elasticity
with respect to this variable is 7.54. Meanwhile in the
world market, the long run export demand elasticity value
with respect to export price, real effective exchange
rate, construct ion activities of industrial countries and
world economic recession are -4.00, -1.32, 4.21 and -0.35
respectively.
The regression results revealed that the government
policy to reduce logging area does not seem to have a
substantial impact on the supply of logs. Also indirectly,
log export royalty and restriction ion policies could
influence log export volume(ceteris peribus). The
government incentives such as low royalty rates on logs
utilised domestic ally can encourage further down stream
processing.
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