150 THE OUTLOOK FOR TIMBER IN THE UNITED STATES 



low-cost substitutes for paper and board in most Such comparisons of timber demands and supplies 



end uses. Also, tor many items such as books, and related price implications, are presented in the 



tissue paper, and various kinds of containers the final chapter of this report. 



cost of paper or board to the final consumer is so 



small in relation to the total price of the product, DEMAND FOR TIMBER PRODUCTS IN NEW 



or to consumer income, that even fairly large HOlKINr 



percentage changes in paper and board prices nvjuaiiNO 



appear unlikely to have much impact on In 1970 roughly a third of the softwood lumber 



C0I A S ur P £ D ' i, i i *.- t.- *_ and Ptywood, plus substantial volumes of other 



Although such general relationships between timber products such as hardwood plywood 



timber product prices and demand seem reasonably particleboard, and insulation board, were used in 



clear, there are no valid quantitative measures of the production of new housing. Future demand for 



the longrun impacts of price increases on demand. 15 housing is also expected to be of great importance 



Estimates were therefore developed on a judgment in determining demand for timber products 



basis to indicate the changes in demand expected This section begins with an analysis of the de- 



to result from changes m product prices, as mand for housing by source of demand, that is, 



s> new households, vacancies, and replacements. 



change in demand resulting from a sustained Because of the large variation in the average use 



i percent rise in relative prices f lumber and other wood products per housing 



Yearsafterpriceincrease ^lu?to&ter?e% **" ^Lt* ^ **?*?* ^ ^ YJT °1 ^ts produced, &**> 



KV is, single-family, multifamily, and mobile units, 



1st _0.i -0.05 have also been evaluated. 16 This is followed by an 



10th In f _0 ' 1 analysis of the use of various timber products per 



05 _0 - 2 unit produced, and by projections of total demand 



These assumptions mean, for example, that a ^ or ti mDer products in the housing sector. 



10 percent increase in lumber prices would result H n „^knU F^^t:^ 



in a 1 percent decrease in demand in the first year MotJ5ehold format.on 



after the price increase. At the end of the fifth New household formations have long consti- 



year, if the price increase were sustained, demand tuted the major source of demand for housing, 



would decrease 3 percent, with a further fall to 5 Although showing considerable fluctuation over 



percent in the tenth year and thereafter. This tne Y ea rs, household formations have increased 



sequence recognizes that it takes time to change to ! Tom an average of about 556 thousand annually 



alternative materials and ways of producing m tne 1920's to around 1 million in the 1960's 



products. (table 115). 



Actual changes in future consumption and in Headship rates. — Household formations depend 



equilibrium prices of timber products and stump- Dotn on tota l growth in population and on the 



age — in con trast to the selected price assumptions number of individuals willing and able to occupy 



presented in this chapter — will be determined separate dwelling units. The latter in turn is 



both by future trends in demands for timber determined largely by the age structure of the 



products and by availability of timber supplies. population and level of income, and is expressed by 



headship rates, that is, the proportion of the 



» Several studies have examined demand-price relation- E^hSS * ^ *** **** ^ ***** ******* 



ships of timber products. Examples of recent studies of n <™senolas. ..,_,. . . ^ 



this kind include: lnere is a well defined relationship between age 



Gregory, G. Robinson. A statistical investigation of and headship (table 116, fig. 59). Typically head- 



KS nf"5)CWoT?965 for hardW °° d fl0 ° ring - F ° reSt ^P rate l rise abru P t] y from the ^-19 year age 



Holland, I. Irving. Some factors affecting the consump- claS ? t0 n the n 25 ~ 2 ?, y ear a ge class. Rates continue 



tion of lumber in the United States with emphasis on to nse slowly until after ages 70-75 when individ- 



demand. Ph.p. dissertation. Sch. For., Univ. Calif., uals reach the point where they can no longer 



fl erKeiey. 1955 maintain separate households. 



and price. ForestScfince ImTlT-ll^o Consumption . Between 1940 and 1970, headship rates increased 



McKillop, W. L. M. Supply and demand for forest significantly in every age class. The sizable in- 



products— an econometric study. Hilgardia 38(1). Univ. crease in headships among older and younger age 



"Mead.ValTer ^Competition and oligopsony in the V*™™ ^ ^ traditionall y lived ™ th relatives 



Douglas-fir lumber industry. Univ. Calif., Berkeley and 



lv™£ Se ™' 1966 't a • 16 The material on demand for housing in this section 



f„„+ 'A * s - econometric analysis of market has been based largely on a detailed study bv Thomas E. 



S» S pv ^ m ™ n g supply and demand for softwood Marcin (Projections of demand for housing bv type of 



T n^Sn 1 079 dlssertatlon De P*- For - Mlch - State Univ., unit and region. U.S. Dept. Agri., Agri. Handb. 428, 76 p. 



tw™ Fit a o i j j 1972). Marcin's study also presents a computer model 



T 11 f^»,' Supply, demand and the lumber market. for estimating future demand for housing by type of unit 



j. rorest. od:o47-55d. 1955. and region. 



