Computer Usage and Demand for Paper/Paperboard Products

The purpose of this paper is to analyze the effect of computer usage on the demand for paper and paperboard products. A log-linear model is developed to analyze the effect of computer usage on the demand for four categories of paper, newsprint, printing/writing paper, packaging paper and household/sanitary paper. The analysis is divided into two parts. The first part is US monthly analysis. We create computer number index as a measurement for computer usage. Monthly data (from Jan 1992 to Jun 2005) are collected to estimate the effect for four categories of paper. The monthly estimation results support the hypothesis that the increasing usage of computer has a significantly negative effect on the demand for printing/writing paper, and a significantly positive effect on the demand for packaging paper. But it doesn't provide enough evidence for the effect on the demand for newsprint. The second part is the yearly analysis on 16 main countries, which constitute the major demand for paper/paperboard products and are countries with widespread usage of computer. Using the yearly data from 1961 to 2002 and applying fixone model, we find that computer usage has a significantly positive effect on demand for packaging paper. The small difference in US monthly analysis and 16 countries yearly analysis may arise from the different measures in computer usage, prices of paper/paperboard products, and income.