Abstract:
Recently, the millwork industry in Oregon, an important consumer
of pine lumber produced in this region, has undergone a series of changes which have seemingly affected its structure and marketing organization.
The principal purpose of this study is to explain these changes in terms of economic analysis and to find out whether they can be supported by the results of stochastic tests.
In the analytical part of the study a very close look is given to the competitive characteristic of the industry and although some trend towards integration and concentration has been detected the industry could still be regarded largely as competitive and labour intensive. Further analytical investigation is concerned with the industrial efficiency in utilization of scarce resources, labour in particular. The results show that labour productivity for the aggregate industry
did not register any gains during the period under observation. However, when arranged in size-groups, firms revealed different performance: medium-size plants noted substantial increases in productivity, while the large and the small plants did not do as well.
In the part concerned with stochastic evaluation the functional interrelationship among various factors influencing the product market is tested with two models; a single multiple regression equation and the four simultaneous equations. Both models are fairly accurate in respect of their predictive capacity but reveal a weakness in the linkage between the sales of millwork products and construction activities.
Another central topic in stochastic evaluation is the application of the Markov principle to the process of the evolution
of firm sizes over a certain time period. It has provided an insight into the transitional movements of firms and spotlighted the long term shift within the industry's structure towards the medium and large size units.
The study raises a question of the adequacy of any single method of analysis, in providing a solution to some specific problems. It attempts to demonstrate the importance of stochastic techniques in strengthening the traditional economic analysis and points out the pitfalls of relying solely on one method in explaining
even relatively simple economic phenomena.
