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Factor Demand and Market Power
Umeå University, Faculty of Social Sciences, Department of Economics.
2004 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

The objective of Paper [I] is to analyze potential effects on the Swedish forest sector of a continuing rise in the use of forest resources as fuel in energy generation. An increasing use of forest resources as an energy input may have effects outside the energy sector. In this paper we consider this by estimating a system of demand and supply equations for the four main actors on the Swedish roundwood market.

In Paper [II], we estimate a dynamic factor demand model for the Swedish pulp industry. We find weak evidence of adjustment costs for capital. The results suggest that the user cost of capital is a significant determinant of pulp industry investments. We also find that pulp industry investments are insensitive to variations in the price of electricity.

Paper [III] proposes a flexible form of adjustment cost function. An empirical illustration shows that the flexible form can detect both convex and non-convex adjustment costs. Furthermore, the flexible form permits testing for the experience effect on adjustment cost.

The objective of paper [IV] is to analyze the price formation for wood fuel used by the Swedish district heating sector. According to previous research there is a significant potential for increasing the use of wood fuel in Sweden. The question raised in this paper is why this potential is not realized. According to our results we cannot reject the efficient market hypothesis for all years.

The objective of Paper [V] is to test for market power on the market for biofuels. To achieve our objective we make use of the idea of Granger causality. If past values of quantity contribute significantly to the determination of price, quantity is said to Granger cause price, which we will treat as a sign of market power. According to our findings this effect is present.

Place, publisher, year, edition, pages
Umeå: Umeå universitet , 2004. , 98 p.
Series
Umeå economic studies, ISSN 0348-1018 ; 633
Keyword [en]
Economics, demand and supply, dynamic factor demand, adjustment costs, bootstrap, panel data, market power
Keyword [sv]
Nationalekonomi
National Category
Economics
Research subject
Economics
Identifiers
URN: urn:nbn:se:umu:diva-279ISBN: 91-7305-670-7 (print)OAI: oai:DiVA.org:umu-279DiVA: diva2:142937
Distributor:
Nationalekonomi, 90187, Umeå
Public defence
2004-06-04, Hörsal S213h, Samhällsvetarhuset, Umeå Universitet, Umeå, 13:15 (English)
Opponent
Supervisors
Available from: 2004-05-12 Created: 2004-05-12 Last updated: 2009-12-23Bibliographically approved
List of papers
1. Biofuels and the forest sector: An econometric model of the Swedish forest sector
Open this publication in new window or tab >>Biofuels and the forest sector: An econometric model of the Swedish forest sector
2000 (English)In: Global concerns for forest resource utilization: Sustainable use and management ; Selected Papers from the International Symposium of the Foresea Miyazaki 1998, Dordrecht: Kluwer Academic Publishers , 2000, 361- p.Conference paper, Published paper (Other academic)
Place, publisher, year, edition, pages
Dordrecht: Kluwer Academic Publishers, 2000
Series
Forestry sciences, ISSN 0924-5480 ; 62
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:umu:diva-4569 (URN)978-0-7923-5968-2 (ISBN)
Available from: 2005-05-08 Created: 2005-05-08 Last updated: 2009-12-23Bibliographically approved
2. A dynamic factor demand model for the Swedish pulp industry: An euler equation approach
Open this publication in new window or tab >>A dynamic factor demand model for the Swedish pulp industry: An euler equation approach
1999 (English)In: Journal of Forest Economics, ISSN 1104-6899, Vol. 5, no 1, 45-67 p.Article in journal (Refereed) Published
Place, publisher, year, edition, pages
Elsevier, 1999
Identifiers
urn:nbn:se:umu:diva-4001 (URN)
Available from: 2004-05-12 Created: 2004-05-12 Last updated: 2009-08-13Bibliographically approved
3. A flexible specification of adjustment costs in dynamic factor demand models
Open this publication in new window or tab >>A flexible specification of adjustment costs in dynamic factor demand models
2001 (English)In: Economics Letters, ISSN 0165-1765, Vol. 72, no 2, 144-150 p.Article in journal (Refereed) Published
Abstract [en]

This paper proposes a flexible form of adjustment cost function. An empirical illustration shows that the flexible form can detect both convex and non-convex adjustment costs. Furthermore, the flexible form permits testing for the experience effect on adjustment cost.

Place, publisher, year, edition, pages
Elsevier, 2001
Keyword
Euler equation, panel data, experience effect
Identifiers
urn:nbn:se:umu:diva-4002 (URN)10.1016/S0165-1765(01)00430-X (DOI)
Available from: 2004-05-12 Created: 2004-05-12 Last updated: 2009-08-13Bibliographically approved
4. Evaluating market efficiency without price data: The Swedish market for wood fuel
Open this publication in new window or tab >>Evaluating market efficiency without price data: The Swedish market for wood fuel
2004 (English)In: Applied Economics, ISSN 0003-6846, E-ISSN 1466-4283, Vol. 36, no 1, 31-39 p.Article in journal (Refereed) Published
Abstract [en]

The overall objective of this paper is to analyse the price development and price formation for wood fuel used by the Swedish district heating sector. According to Lnner et al., there is a significant potential for increasing the use of wood fuel in Sweden, at a fairly moderate cost. The basic question raised in this paper is then why this potential is not realized. Specifically, a methodology is proposed for testing whether the reason is that market imperfections are present. As a first step the shape of the technology in the Swedish district heating sector is estimated for the period 1989 to 1996. In the second step the estimated technology and the assumption of cost-minimizing firms are combined to calculate shadow prices, i.e. marginal valuation of wood fuel in this sector. If the average shadow price significantly deviates from the average observed price one may conclude that this market is functioning inefficiently due to imperfections. According to constructed bootstrap confidence intervals this difference is significant only for three out of eight years, implying that the quantities of wood fuel traded are too small. For the other years the difference is not significant, implying that one cannot, on statistical grounds, reject the efficient market hypothesis for all years.

Place, publisher, year, edition, pages
Routledge Taylor Francis Group, 2004
National Category
Economics
Identifiers
urn:nbn:se:umu:diva-26889 (URN)10.1080/0003684042000177170 (DOI)
Available from: 2009-10-30 Created: 2009-10-30 Last updated: 2017-12-12Bibliographically approved
5. Biofuels and market power: The case of Swedish district heating
Open this publication in new window or tab >>Biofuels and market power: The case of Swedish district heating
2004 (English)Report (Other academic)
Abstract [en]

This paper tests for market power on the market for biofuels, employing a statistical model and making use of the idea of Granger causality. We use a panel data set of plant specific input prices and quantities of wood chip covering 91 Swedish district heating plants 1990-1996. If quantity Granger causes price, it is taken as an indication of market power. We find that the Swedish district heating plants to some degree have market power in the market for wood chips.

Place, publisher, year, edition, pages
Umeå: Umeå universitet, 2004. 14 p.
Series
Umeå economic studies, ISSN 0348-1018 ; 634
Keyword
market power, Granger causality, VAR, biofuel, district heating
Identifiers
urn:nbn:se:umu:diva-4004 (URN)
Distributor:
Nationalekonomi, 90187, Umeå
Available from: 2004-05-12 Created: 2004-05-12 Last updated: 2009-08-13Bibliographically approved

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