PRODUCTION STRUCTURE AND THE AUSTRALIAN SAWMILLING INDUSTRY*

This paper examines the production structure of the Australian sawmilling sector over the period 1950-51 to 1984-85 using a translog cost function. The results show that the sawmilling industry is best represented by a production function which does not have any restrictions on functional form. Inputs, including capital, labour, materials and energy, are generally found to substitutable for one another, although the degree of substitutability is small. There have been economies of scale in the Australian sawmilling industry, and technological change has been capital and energy-using, and labour and materials-saving.