US Newsprint Demand Forecasts to 2020

Hetemaeki, L. & Obersteiner, M. ORCID: https://orcid.org/0000-0001-6981-2769 (2001). US Newsprint Demand Forecasts to 2020. IIASA Interim Report. IIASA, Laxenburg, Austria: IR-01-070

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Abstract

The purpose of this study is to provide projections of newsprint demand for the United States (US) up to 2020. Three different approaches were used to compute the projections. First, various specifications of the standard model used in forest product demand literature, which we call the "classical model", were estimated using annual data from 1971-2000. The results indicated that structural change in the newsprint consumption pattern took place at the end of the 1980s. The classical model fails to explain and forecast the structural change. It appears that changes related to the development of consumers preferences and information technology (IT) may have caused the break down of the widely accepted positive relationship between the gross domestic product (GDP) and newsprint demand. These observations motivated the formulation of alternative models. Thus, a "Bayesian" model that allows industry experts' prior knowledge about the future demand for newsprint to be included in the projections was estimated. Also, an "ad hoc" model, in which newsprint demand is a function of changes in newspaper circulation, was used to compute projections. Finally, the forecasts of these models are evaluated along with some of the existing projections. Besides providing an outlook for US newsprint demand, the study contributes to the existing literature of long-term forest product demand by raising some methodological questions and by applying new models to compute projections. Contrary to some recent projections (e.g., FAO), the results indicate that US newsprint demand is likely to decline in the long run.

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