econometric model of canada's newsprint exports to the united states of america
abstract
an econometric model was built for predictive purposes and
for understanding the relationship between the us market and
canadian newsprint producers. in this study, a
simultaneous-equation model was developed, which consists of
four equations, one each for the supply, export, consumption
and price of newsprint. the period of 1955-1986 was covered
by this model. the data for the years 1985 and 1986 were
reserved to test the predictive power of the model. in
fitting the four equations for the period of 1955-1984, the
coefficients of determinations, the r-square values, between
observed and predicted values were higher than 99 per cent.
the test results of the forecasting power showed that there
was no difference between predicted and observed values at
the 5 per cent level of significance. sources of forecasting
error are expressed as three partial inequality coefficients
associated with bias, variance and covariance of predicted
and observed values. in the present forecast, the major
source of error came from the covariance between the
predicted and observed values. this could not be further
reduced. the model can be used to make annual predictions
and provides an accurate means of predicting demand, supply,
consumption and price of canadian newsprint exports to the
united states of america.
collections
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