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An Econometric Model of Philippine Wood Production and Export
Thesis Abstract:
The study attempted to make an econometric analysis of the production and export aspects of the forestry sector which consists of four categories or industries: logs, lumber, plywood0veneer and pulp-paper.
The Cobb Douglas production function was used to form a model for every industry of Philippine forestry. The equations of labor demand and of price determination for every category were also established. The empirical results were found quite satisfactory in terms of the correlation coefficients in the framework of the regression analysis.
Finally as a whole, the forestry sector was examined in terms of forestry production, export, employment and investment. An outline to solve simultaneously this system of equations was proposed.
The following economic implications may be derived from the study: (1) the high value of marginal productivity of labor (MPL) in the logging industry suggests the possibility of increasing log production by raising the employment level; (2) on account of the high value of MPL in the lumber industry, which is much lower than that in the logging industry, an additional investment of capital in lumber would give much more profit than in logging; (3) since the MPL level in the plywood-veneer industry exceeds those of lumber and logging, the production level of plywood and veneer could be economically improved by an increase in capital investment.