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Evaluation of the Substitutability between U.S. and Canadian Softwood Lumber

Author

Listed:
  • Roman, Angel Aguiar
  • Foster, Kenneth A.
  • Shook, Steve

Abstract

Softwood lumber trade between the United States and Canada has worldwide attention due to its economic importance and for lengthy dispute. Most studies have focused on welfare effects of the dispute, while few studies have evaluated the question of likeness of product. This study evaluates the substitutability between U.S. and Canadian softwood lumber including other countries' softwood lumber. Price elasticities are derived from the linear approximation of the Almost Ideal Demand System. The results show that softwood lumber imports to the U.S. from various countries are indeed substitutes for U.S. softwood lumber. The Morishima elasticities of substitution indicate that other countries have a higher degree of substitutability than Canadian softwood lumber.

Suggested Citation

  • Roman, Angel Aguiar & Foster, Kenneth A. & Shook, Steve, 2006. "Evaluation of the Substitutability between U.S. and Canadian Softwood Lumber," 2006 Annual meeting, July 23-26, Long Beach, CA 21114, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea06:21114
    DOI: 10.22004/ag.econ.21114
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    File URL: https://ageconsearch.umn.edu/record/21114/files/sp06ag01.pdf
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    References listed on IDEAS

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    1. Jan K. Lewandrowski & Michael K. Wohlgenant & Thomas J. Grennes, 1994. "Finished Product Inventories and Price Expectations in the Softwood Lumber Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(1), pages 83-93.
    2. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
    3. Richard Green & Julian M. Alston, 1991. "Elasticities in AIDS Models: A Clarification and Extension," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(3), pages 874-875.
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