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TERRA ECONOMICUS

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  • Elasticity of demand for forestry products in macro-regions of Russia: Models to forecast sector development

Elasticity of demand for forestry products in macro-regions of Russia: Models to forecast sector development


TERRA ECONOMICUS, , Vol. 22 (no. 1),

Forecasting the development of sectoral markets requires a comprehensive understanding of the relationship between product output and demand, both domestically and in foreign trade. This work aims to assess the demand elasticity for forestry products in Russia’s largest macro-regions, grouped according to the current administrative-territorial division into federal districts. Given the pronounced export orientation of production in the Russian timber industry, demand is modeled through production volume assuming that the market reaches partial equilibrium in the medium term. The coefficients of elasticity of demand for forest products by price and other economic parameters are estimated using quarterly data from 2010 to 2023, yielding statistically significant results. The estimates I obtained are primarily used in structural models of the Russian forest industry, with regional peculiarities taken into account. The case of sawn timber production dynamics in Siberian regions shows that the most favorable scenario for forest industry development is the outstripping growth of domestic demand for this type of product, driven by the growth of individual and multi-apartment housing construction. The implementation of these models is crucial for predicting industry development and creating a well-balanced timber industry policy. This is particularly important given the recent trade restrictions across the world.
Citation: Pyzhev A.I. (2024). Elasticity of demand for forestry products in macro-regions of Russia: Models to forecast sector development. Terra Economicus 22(1), 104–116 (in Russian). DOI: 10.18522/2073-6606-2024-22-1-104-116
Acknowledgment: The study was funded by the Russian Science Foundation grant № 19-18-00145. https://rscf.ru/en/project/19-18-00145/


Keywords: forest industry; forest economics; price elasticity of demand; forestry products; econometric modeling; retrospective analysis

JEL codes: Q23, N54, P25

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Publisher: Southern Federal University
Founder: Southern Federal University
ISSN: 2073-6606