ECONOMETRICS MODEL FOR PLYWOOD IN THAILAND

Abstract

The objectives of the study were to formulate a demand, supply, and price model of plywood, to determine the elasticities of demand and supply with respect to each exogenous variable included in the model; and to project price, production and consumption of plywood in Thailand. The regression coefficients of the models were estimated by a two stage least squares method. The study found that factors affecting the demand and supply of plywood were the average wholesale price of plywood and mixed cement; and the lag of one year of average wholesale price of plywood and quantity of imported logs, respectively. In addition, factors relating to the average wholesale price of plywood were the difference between the previous year production and consumption of plywood and per capita income. The coefficient of determination (R²) of demand, supply and price of plywood were 0.848, 0.809 and 0.954 respectively. The elasticity of demand for plywood with respect to average wholesale prices of plywood and mixed cement were 0.1713 and 5.6395 respectively. The elasticity of supply of plywood with respect to lag of one year of average wholesale price of plywood and quantity of imported logs were 0.6404 and 0.3124 respectively. The projection of demand, supply, and average wholesale price of plywood for a ten year period (1998 - 2007) were carried out. The results of the projection show that the growth rate of demand, supply and price of plywood were 11.32, 19.64 and 5.89 percent, respectively.