Overview of Econometric Researches on Price and Demand/Supply Structure after World War II

Abstract

Economic studies of the timber price and the demand/supply structure after World War II had been conducted mainly by the following four researchers, Akai, Handa, Kishine and Nomura. In this report, we overview their research results as well as those of others afterwords. Our findings are as follows. (1) Akai analyzed the time trend based on the ascent or decent of timber price, and discussed the trend fluctuations from the change of demand and supply structure. (2) On the debate of price by Nomura and Handa, price of domestic timber demand and supply were estimated to be non-elastic with approximately 0.2–0.5, from Nomura, Kishine and the later studies like that of Nomura, although the estimation of the price elasticity differs for the target period, products and the derived supply and demand function. (3) In the period of the high economic growth rate, the price fluctuation was influenced remarkably by the shift factor of the demand and the imported timber as a substitute material replacing the domestic timber rather than as a complementary material. (4) It may not be able to describe the supply behavior of forest owner by the utility theory. A multiple-choice assumed profit maximization, that is, whether harvesting the fixed amount of timber (an available forest inventory) now or later with an expected price, may be more suitable for this purpose than a multiple-choice of money and the reservation demand (an available forest inventory), which assumed the utility maximization.