Determinants of Prices of Paper and Paperboard in the European Union from 1969 to 1992

The price of paper and paperboard (newsprint, printing and writing, and other paper and paperboard) in the European Union was hypothesized to be a function of input costs, scale of production, and technical change. The price models were estimated with panel data over the period 1969-1992. Application of duality theory allowed recovery of the parameters of the production function. Conditional demand equations were also obtained showing how relative factor prices, volume of production, and technical change affect the utilization of the various inputs. Judging from the magnitude of partial elasticities, paper and paperboard prices were most responsive to the prices of pulp, labor, capital and energy, in that order. Technological change accounted for a decline in real prices of paper and paperboard from 1969 to 1992.