Abstract
In an effort to clarify short-term fluctuation in the log market in Japan, I estimate demand and supply functions for Sugi sawlog in Miyazaki Prefecture using monthly data of 108 months from 2005 to 2013. Price elasticity estimates are 0.301 for demand and 0.566 for supply, meaning both demand and supply are inelastic. It is considered to be a factor explaining relatively large fluctuations observed in price. The monthly shifts of both curves are highly correlated with a correlation coefficient 0.697. From this observation it is considered that the shifts of demand and supply synchronize each other to some extent to show a similar seasonal pattern, so that market fluctuation is somewhat stabilized. It is also found that the amount of monthly curve shift is slightly larger for demand than for supply, which leads to a slightly larger price and quantity changes induced by demand shift.
