Canadian Forest Service Publications
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An analysis of the Japanese demand for wood products by type, species and source. 1997. Gaston, C.W. Natural Resources Canada, Canadian Forest Service, Pacific Forestry Centre, Victoria, BC. Working Paper WP-97.02.
Abstract
The degree of wood product substitution in Japan is quantified by disaggregating wood product imports by product type, species and country of origin between 1965 and 1993. The results showed that individual wood products behaved as distinct economic units: softwood logs had the smallest own price elasticity of demand while panel products displayed the largest price elasticity; softwood lumber from Canada had the lowest own price elasticity of demand while New Zealand and Chile had the largest; and red cedar from the United States and yellow cedar from Canada displayed the smallest own-price elasticity while SPF (and other planed lumber) had the highest own price elasticity of demand. In spite of the increasing purchasing power of the Yen over the study period, Japanese buyers remained price sensitive, yet were willing to pay a considerable price premium for certain products. The Japanese buyer appeared to view different wood products as having different levels of substitutability, highlighting the importance of improving knowledge about Japan's buying habits. Given this, further methodological research should focus on a hedonic approach (demand for attributes of a product) rather than a parametric approach.