Growth and decline of the paper industry: an econometric analysis of US regions

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Abstract
An explanation was sought of the different growth of the paper and paperboard industries in regions of the United States. To that end, a theory of regional demand and supply was formulated. Elasticities of regional production with respect to important supply and demand factors were then calculated by econometric methods, with data for the period 1950–78. These elasticities were used, together with the observed average annual percentage changes of the corresponding variables, to determine the contribution each had on the growth of production. The results indicated that demand was the major factor causing the differences in growth rates. The rapid growth of paper and paperboard production in the regions of the South and West was spurred mostly by high economic and demographic growth in their market area. Supply (cost) factors, and the price of paper substitutes, were found to have played a minor role in comparison.