J. For.

114(4):433– 440
RESEARCH ARTICLE http://dx.doi.org/10.5849/jof.15-096
Copyright © 2015 Society of American Foresters

economics

The Effects of Internet Use on Global Demand

for Paper Products

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Greg S. Latta, Andrew J. Plantinga, and Matthew R. Sloggy

In recent decades, the Internet, together with information and communication technologies such as personal solid logs to chips. An example of a shift
computers and cellular phones, has provided an electronic alternative to newspapers and printed materials. We interacting with another sector is fossil fuel-
examine how Internet adoption has affected worldwide demand for newsprint and printing and writing papers. derived heat (coal and coal-derived electric-
We find that the Internet has reduced demand for newsprint in all regions. These regions include the United ity and natural gas) and central heating
States, the Organization for Economic Co-operation and Development (OECD) countries other than the United systems replacing solid wood-burning fire-
States, the countries of the former Soviet Union (Reform), the Asian countries not in the OECD (Asia), and places and stoves. There is mounting evi-
developing countries in Africa and Latin America. The effect is strongest in the United States, where we predict dence that such a structural shift has oc-
that as of 2011 newsprint consumption would have been 4 times higher in the absence of the Internet. The curred in our communication consumption
effects on printing and writing papers are more varied. The Internet is found to have reduced consumption in patterns, shifting preferences away from pa-
the United States and OECD countries, had a negligible effect in Asia and the Reform region, and increased per products and toward electronic media.
consumption in Africa and Latin America. By accounting for Internet adoption, our new demand estimates have Failure to represent this structural change in
the potential to improve forecasts of paper consumption contained in forest outlook studies. outlook studies is likely to bias estimates
of potential policies and their associated
Keywords: forest products markets, newsprint, printing and writing paper, Internet, substitution
impacts.
In recent decades, the Internet, to-
gether with information and communica-

G
lobal markets for wood products
are strongly influenced by changes
in a wide range of resource, regula-
tory, and market factors. These changes can
result in an array of environmental, eco-
nomic, and distributional impacts. For this
reason, forest sector studies are conducted at
the regional, national, and global scale to
evaluate different potential economic and
regulatory outlooks. These “outlook” stud-
ies require parameterization of not only fu-
ture environmental regulations and how
timber inventories will grow through time
but also how forest products markets will
evolve and respond to changes in future de-
mographic and economic stimuli. A major
assumption made by most outlook studies is
that current behavior regarding product
consumptive preferences will continue in fu-
ture decades. This is a necessary simplifica-
tion in that it is impossible to predict future
structural changes in markets despite the fact
that history is full of such episodes. A further
complication is that such structural changes
can take different forms.
These shifts can take the form of prod-
uct substitution within the forest sector such
as the gradual shift from plywood, which
had replaced solid boards, toward oriented
strand board for sheathing. The impact of
this shift was borne out largely within the
forest sector as input demand moved from
tion technologies such as personal comput-
ers and cellular phones, has provided an
electronic alternative to newspapers and
printed materials. In general, the availability
of a new product can affect the demand for
an existing product in two ways: it can re-
duce the quantity demanded by consumers
as they substitute away from the existing
product or it can increase demand if use of
the new product is complementary with that
of the existing product. At the end of 20th
century, it was anticipated that adoption of
electronic media would result in declining
newsprint consumption whereas use of
printing and writing paper, especially office

Received July 3, 2015; accepted October 22, 2015; published online December 31, 2015.
Affiliations: Greg S. Latta (greg.latta@oregonstate.edu), Forest Engineering, Resources and Management, Oregon State University, Corvallis, OR. Andrew J.
Plantinga (plantinga@bren.ucsb.edu), Bren School of Environmental Science and Management, University of California, Santa Barbara. Matthew R. Sloggy
(sloggym@onid.oregonstate.edu), Department of Applied Economics, Oregon State University, Corvallis, OR.
Acknowledgments: We acknowledge helpful comments from session participants at the joint meeting of the Western Forest Economists and the International Society of
Forest Resource Economics, Vancouver, BC, May 31 to June 2, 2015 as well as helpful comments by anonymous reviews and editorial staff. This research was
supported by a grant from the National Institute of Food and Agriculture (USDA-NIFA-AFRI-004008). Senior authorship is not assigned.

Journal of Forestry • July 2016 433

paper, would increase with the adoption
of personal printers (Cody 1999). The
first purpose of this article is to review
trends up to the present in the consump-
tion of paper products alongside data on
Internet adoption.
Our second objective is to present the
results of a formal economic analysis that
quantifies how paper demand has been af-
fected by the Internet in different parts of
the world. Results from our analysis provide
a parameterization of the demand shift that
can be incorporated into future forest sector
outlook studies. Although the data on paper
consumption and Internet adoption are sug-
gestive, it is important to recognize other
form), and Africa and Latin America (ALM)
countries, as defined in the IPCC [Intergov-
ernmental Panel on Climate Change] Special
Report on Emissions Scenarios (Nakicenovic
and Swart 2000). These data were supple-
mented by observations of gross domestic
product (GDP) and population, as well as
Internet usage as a share of the population.
We also explored the use of country-level
data. However, we encountered problems
with missing and inaccurate data and chang-
ing country definitions, which the use of re-
gional data allowed us to circumvent.
Data on apparent consumption and
weighted prices were taken from the FAO
forestry database (FAO 2014). Apparent
per 100 persons, were taken from the World
Bank and the International Telecommuni-
cation Union (World Bank 2014). An Inter-
net user is defined as anyone who has access
to the Internet, through any device, either at
home, at work, or elsewhere, regardless of
whether the individual has a subscription to
an Internet service provider. This definition
of Internet use does not account for Internet
quality (e.g., the speed of an Internet con-
nection), which can vary considerably across
countries. However, we expect Internet use
and quality to be closely linked. As discussed
in the next section, Internet use is highest in
developed regions of the world, which is also
where Internet speeds are the fastest (Speiser

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factors that have been at work, including the
economic recession that began in 2007 in
the United States and later spread to Europe.
In our statistical analysis, we control for the
effects of factors such as income on demand
for paper products. We identify the effects of
the Internet by exploiting variation over
time and among regions in Internet adop-
tion. Having estimated the parameters of the
demand models, we conduct a counterfac-
tual simulation of paper demand in which
we hold Internet adoption at zero. Compar-
ison of simulated demand with actual de-
mand provides an estimate of how Internet
adoption has affected paper consumption
historically.
Given our primary objective of review-
ing recent trends in paper and Internet con-
sumption, we take the somewhat unortho-
dox approach of presenting in the next
section the data and an analysis of trends in
the data. This is followed by a section de-
voted to prior studies of paper demand, our
methods, and results. We end with a sum-
mary of findings and conclusions, including
a discussion of how our findings compare to
forest sector outlook projections for the
United States.
Paper Consumption and
Internet Adoption
Data
We assembled Food and Agriculture
Organization of the United Nations (FAO)
data on prices and consumption by major
world regions for the period 1970 –2011.
The regions are the United States, other Or-
ganization for Economic Co-operation and
Development (OECD) countries such as
Canada, Japan, and Great Britain, non-
OECD countries in Asia, the countries be-
longing to the former Soviet Union (Re-
consumption was calculated for each coun- 2015).
try by adding production to imports and The use of aggregate data, especially
subtracting exports. This measure has been from developing countries, raises concerns
used in earlier studies (e.g., Buongiorno about measurement error. If these errors are
1978). Country-level prices were calculated uncorrelated with the independent variables
by dividing the total value of imports and in our statistical analysis, then our statistical
exports by the total quantity of imports and estimates are unaffected. However, there are
exports. These prices were converted from reasons why this may not be the case. For
nominal values to 2005 US dollars using the example, if data from developed countries
country-level Consumer Price Index from are more accurate, then the measurement er-
the US Department of Agriculture, Eco- ror may be correlated with the GDP variable
nomic Research Service (2014). Apparent in our model, which can result in biased es-
consumption was aggregated to the regional timates. We reduce the potential for bias by
level and a weighted price was computed for including region-specific dummy variables
each region by averaging country-level (fixed effects) in the model. The fixed effects
prices. control for measurement error that is spe-
Annual observations of the US popula- cific to regions and constant over time.
tion were taken from the Federal Reserve
Economic Data (Federal Reserve Bank of St. Trends
Louis 2014), whereas population data for In the United States, newsprint con-
the rest of the world were from the US De- sumption began to level off in the 1990s and
partment of Agriculture, Economic Re- then declined steadily throughout the 2000s
search Service (2014). GDP data for each decade (Figure 1, left panel). A similar pat-
country were also from the Economic Re- tern is evident in the OECD countries, ex-
search Service. Interest rates for each coun- cept that the leveling off began later, in the
try were taken from the World Bank (2014). first half of the 2000s decade. However, be-
Interest rates for each region were calculated tween 2007 and 2011, OECD newsprint
as a GDP-weighted average. Finally, data on consumption declined by 22%. The pat-
Internet usage, measured in Internet users terns for consumption of printing and writ-
Management and Policy Implications
Effective forest policy and management decisionmaking requires both insight into the potential aggregate
impacts and sensitivity to changes in future resource and market stimuli. Good decisions therefore
necessitate incorporation of the latest resource, regulatory, and market conditions. In this study, we
evaluate data representing global newsprint and printing and writing paper demand and juxtapose trends
in gross domestic product (GDP) and Internet adoption for five global regions over the years 1970 –2011.
We note a structural change in the paper market as people have embraced electronic alternatives to
newspapers and printed materials. We then estimate sensitivity parameters of paper demand to changes
in GDP and Internet adoption and demonstrate how not accounting for this interaction can lead to
misrepresentation of paper demand and thus unreliable management or policy expectations.

434 Journal of Forestry • July 2016


Figure 1. Regional trends in newsprint consumption, P&W paper consumption, and Internet adoption per hundred people from 1970
through 2013.
ing (P&W) paper are also similar in the
United States and OECD countries (Figure
1, middle panel). Consumption leveled off
in the early 2000s and then declined by 29%
in the United States and 18% in the OECD
countries. The decline in newsprint and P&W
paper consumption is mirrored by the steady
rise in Internet use. Internet adoption began in
the mid-1990s in the United States and
OECD countries, rising to a rate in 2011 of
approximately 75% of the population (Figure
1, right panel). Among other factors, the use of
recycled paper may influence the observed
trends in paper production. The substitution
of lower-cost recycled fiber for virgin materials
is likely to increase paper production, all else
constant. Berglund et al. (2002) find that the
use of recycled fibers is greater in higher-in-
come countries.
The recent declines in paper consump-
tion observed in the United States and
OECD countries are seen to a lesser extent
in the rest of the world (Figure 1, left and
middle panels). Consumption of newsprint
and P&W paper in the Asia and ALM re-
gions continued to increase throughout the
2000s. Only in Asia does newsprint con-
sumption appear to be leveling off in recent
years. In the Reform region, which includes
countries of the former Soviet Union and
Eastern Europe, newsprint consumption de-
clined by 12% between 2007 and 2011, but
consumption of P&W paper has been rela-
tively flat. Compared with that in the
United States and OECD countries, Inter-
net use in these regions began later, and
adoption rates are between only 25 and 35%
(Figure 1, right panel).
Modeling the Demand for
Paper Products
Previous Literature
Since Buongiorno (1978), forest
economists have used statistical methods
to quantify the determinants of demand
for paper products (newsprint, P&W pa-
per, and paperboard). The study of Zhang
and Buongiorno (1997) is one of the first
to examine whether electronic media
(computers, televisions, and radio) had an
effect on paper demand. They found no
evidence of effects over the period 1960 –
1991. More recently, authors have ob-
served the consumption trends in Figure 1
and have suggested that structural breaks
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may be due to the adoption of information
technologies (Hetemäki and Obersteiner
2001, Hetemäki 2005, 2008, Soirinsuo
and Hetemäki 2008, Szabó et al. 2009).
However, none of these studies evaluated
explicit measures of Internet adoption.
The exception is Hujala (2011), who esti-
mates statistical models of newsprint, of-
fice paper, and magazine paper consump-
tion using country-level data for the
period 1990 –2007. She includes measures
of adoption rates for information and
communication technologies, finding that
Internet adoption is negatively related to
newsprint consumption. Mobile phones
and personal computers are positively re-
lated to magazine paper and office paper
consumption, respectively. A shortcoming
of this study is that it does not control for
price, which is a basic determinant of de-
mand and is found to be a significant fac-
tor in our analysis.
Methods
We estimate separate demand func-
tions for newsprint and P&W paper. In each
case, the dependent variable is the natural
log of the quantity consumed and the inde-
Journal of Forestry • July 2016 435
Table 1. Estimation results for models of newsprint and P&W paper demand.

Newsprint P&W paper

Variable definition Variable name Coefficient T-statistic Coefficient T-statistic

Constant term ␤0 8.406 9.64 10.032 10.23

Log of price P ⫺0.474 ⫺5.06 ⫺0.660 ⫺7.98
Log of GDP per capita GDP 1.080 22.47 1.105 19.29
Log of Internet use rate INT 0.080 0.94 0.365 3.99
Interaction of Internet and GDP variables INT ⫻ GDP ⫺0.018 ⫺2.06 ⫺0.037 ⫺3.95
Dummy variable for OECD region D2 0.314 6.47 0.645 11.89
Dummy variable for Asia region D3 2.515 13.82 3.045 14.18
Dummy variable for Reform region D4 ⫺0.013 ⫺0.12 0.162 1.23
Dummy variable for ALM region D5 0.890 6.97 1.184 7.90
Interaction of US dummy and Internet variables D1 ⫻ INT 11.091 7.91 7.495 4.75
Interaction of US dummy, Internet, and GDP variables D1 ⫻ INT ⫻ GDP ⫺1.054 ⫺8.01 ⫺0.707 ⫺4.78

The dependent variable is the newsprint or printing and writing paper consumption.

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pendent variables include measures of price,
GDP, and Internet use. In competitive mar-
kets, the quantity and price of a good are
determined through the interaction of de-
mand and supply, implying that quantity
and price are determined simultaneously. As
such, a regression of quantity on price and
other variables identifies neither the demand
function nor the supply function. To obtain
estimates of the demand function, we apply
a procedure called two-stage least squares
(see, e.g., Judge et al. 1988). The instru-
ments we use are lagged price, as in earlier
studies (Li et al. 2006, McCarthy and Lei
2010, Karikallio et al. 2011), and the re-
gional interest rate. The interest rate is as-
sumed to influence investment in paper
manufacturing and, therefore, affect paper
supply but not paper demand.
The additional determinants of de-
mand include the natural log of GDP per
capita. GDP measures the flow of goods and
services through the economy and serves as a
proxy for income. Regions with higher GDP
are expected to consume more paper prod-
ucts, all else equal.1 Internet adoption is
measured as the logged percentage of the
population who use the Internet (we add 1
to the Internet variable so that its natural log
is defined at zero). The Internet variable en-
ters the model on its own and also interacts
with logged GDP (i.e., the product of the
Internet and GDP variables is included in
the model). This allows the marginal effect
of Internet adoption on demand to vary be-
tween high- and low-income regions. Pre-
liminary results revealed a relatively poor fit
with the data for the United States. To rem-
edy this problem, we included separate In-
ternet variables for the US region. Finally,
we included in the model a constant term
and region-specific dummy variables.
A formal statement of our econometric
model is
C jt ⫽ ␤ 0 ⫹ ␤ 1 P jt ⫹ ␤ 2 GDP jt ⫹ ␤ 3 INT jt
⫹ ␤ 4 共INT jt ⴱGDP jt 兲
⫹ ␤ 5 共D 1 ⴱINT 1t 兲
⫹ ␤ 6 共D 1 ⴱINT 1t ⴱGDP 1t 兲
⫹ 冘 ␥ j D j ⫹ ␧ jt
j⫽2,5
(1)
where C is logged consumption (newsprint
or P&W paper), P is logged price, GDP is
logged GDP per capita, INT is logged Inter-
net adoption, Dj is a dummy variable for
region j, and ␧ is the error term. The sub-
script j takes the values 1 to 5, where 1 ref-
erences the US region and t indexes the years
1970 –2011. The ␤s and ␥s are the parame-
ters we estimate using two-stage least
squares.
Results
The estimation results for the news-
print and P&W paper models are reported
in Table 1. The full set of results, including
the first-stage price regressions, are found in
Supplemental Table S1. In the newsprint
model, most of the coefficient estimates are
significantly different from zero at the 5%
level and have the expected signs. In partic-
ular, the price coefficient (␤1) is negative and
is significantly different from zero. The co-
efficient on Internet use (␤3) is not signifi-
cantly different from zero, but the coeffi-
cient on the interaction of the Internet and
GDP variables (␤4) is negative and signifi-
cant. In the P&W model, all of the coeffi-
cient estimates are significantly different
from zero, with the exception of the dummy
variable for the Reform region. The price
coefficient is negative, as expected. The In-
ternet adoption variable has a positive coef-
ficient, but the interaction of the Internet
and GDP variables has a negative coeffi-
cient. The effects of the Internet and GDP
are different in the United States compared
with those for the other regions.
Because the price, Internet, and GDP
variables in our model are specified in loga-
rithms, the estimated coefficients are elastic-
ities. That is, they indicate the percent
change in paper consumption given a 1%
increase in the corresponding variable, all
else constant.2 For newsprint, we estimate
that a 1% increase in price decreases con-
sumption by 0.47%, holding all other fac-
tors constant (Table 1). The estimate for the
P&W paper model reveals that consumers
are more responsive to price changes: when
price increases by 1%, all else constant, the
quantity demanded falls by 0.66%. These
estimates, referred to as price elasticities of
demand, are similar to those reported in pre-
vious studies (Buongiorno 1978, Hetemäki
and Obersteiner 2001). We investigated
whether Internet adoption has affected the
responsiveness of consumers to price
changes, but did not find consistent evi-
dence for this effect.
In the newsprint model, the coeffi-
cient on the interaction of Internet use
and GDP per capita (␤4) is negative and
significantly different from zero. This in-
dicates that Internet adoption reduces
newsprint consumption by more in coun-
tries with higher incomes. For example,
for the OECD region in 2011, a 1%

Supplementary data are available with this article at http://dx.doi.org/10.5849/jof.15-096.

436 Journal of Forestry • July 2016


Figure 2. Simulated consumption of newsprint and P&W paper with no Internet, compared with actual and modeled consumption, by
region, 1970 –2013.
increase in Internet use reduced newsprint
consumption by approximately 0.19%
compared with declines of approximately
0.15% in the Asia, Reform, and ALM re-
gions. The effect in the United States is
even larger. A 1% increase in Internet use
in 2011 reduced newsprint consumption
by 0.38%. The results for P&W paper in-
dicate that the Internet is a substitute for
P&W paper in the United States. In the
United States, a 1% increase in Internet
adoption is associated with a 0.11% de-
cline in consumption of P&W paper. This
estimate is significantly different from
zero at the 5% confidence level. In the
other regions, we estimate smaller mar-
ginal effects (in absolute value) of Internet
adoption on P&W paper consumption,
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none of which are significantly different
from zero.
We measured how income affects de-
mand for newsprint and P&W paper and
how this effect varies with the level of Inter-
net adoption. Before the Internet became
available, higher income regions, as mea-
sured by GDP per capita, consumed more
newsprint and P&W paper. For both prod-
Journal of Forestry • July 2016 437
ucts, a 1% increase in GDP per capita was
associated with an approximately 1.1% in-
crease in consumption (the estimated value
of ␤2), all else constant. These estimates are
similar to those found in previous studies
(e.g., Simangunsong and Buongiorno
2001). Our results show that Internet adop-
tion has decreased the responsiveness of de-
mand to income growth, as conjectured by
previous authors (Bolkesjø et al. 2003). For
example, in a region with an 80% Internet
adoption rate, we estimate that a 1% in-
crease in GDP per capita increases newsprint
demand by 1% and P&W paper demand by
0.94%. This effect is significantly different
from zero at the 5% confidence level. Al-
though paper demand responds positively to
income growth in most regions of the world,
our results suggest that this is no longer the case
in the United States. At the current rate of In-
ternet adoption, further increases in GDP per
capita are expected to lower demand for news-
print and P&W paper. These goods have be-
come for US consumers what economists refer
to as inferior goods. As income increases, de-
mand for inferior goods falls.
We use our statistical results to explore
how newsprint and P&W paper consump-
tion would have evolved in the absence of
the Internet. For this exercise, we set price
and GDP per capita at their actual values
over the period 1970 –2011 but hold Inter-
net adoption at 0% in each period. This gen-
erates counterfactual simulations of news-
print and P&W paper consumption that can
be compared to actual consumption (Figure
2). Of course, GDP growth was probably
fueled in part by the introduction of infor-
mation and communications technologies
and so our counterfactual case does not en-
tirely remove the effects of the Internet. We
also report fitted values in Figure 2, which
are the predicted values using our model and
the actual values of all variables, including
Internet adoption. The fitted values show
that our models do a good job of tracking
actual consumption over time.
Results in the left column of Figure 2
reveal that Internet adoption has reduced
newsprint consumption in all regions of
the world, although the effect in the ALM
region is negligible. The effect is largest in
the United States, where we predict that as
of 2011 newsprint consumption would
have been 4 times higher in the absence of
the Internet. The effects in other regions
are smaller, but still substantial: newsprint
consumption would have been 100, 50,
and 125% higher in the OECD, Asia, and
438 Journal of Forestry • July 2016
Figure 3. Forecasts of US newsprint and P&W paper consumption compared with actual
and fitted (our model) estimates.
Reform regions, respectively, without the
Internet. Effects on P&W paper are not
nearly as large. We predict that with no
Internet P&W paper consumption would
have been 100% and 40% higher in the
United States and OECD region, respec-
tively. We find negligible effects in Asia
and the Reform region and a consump-
tion-increasing effect of the Internet in
the ALM region, where we predict that
Internet adoption raised consumption of
P&W paper by 50%. However, we cannot
reject the null hypothesis that this effect is
zero.
Discussion and Conclusions
In this study, we examine how Inter-
net use has affected demand for newsprint
and P&W paper in different regions of the
world. We find that Internet adoption re-
duces newsprint demand in all regions, al-
though the effects are strongest in the
United States, the OECD countries, and
the Reform region. One possible explana-
tion is that Internet connectivity is better
in higher income countries, facilitating
greater use of electronic media. In con-
trast, the demand for P&W paper is neg-
atively affected by the Internet in the
United States but has not been greatly af-
fected in the other regions of the world.
Thus, the Internet and associated technol-
ogies are a substitute for newsprint in all
regions and a substitute for P&W paper in
United States. Interestingly, at the end of
the 20th century, it was thought that the
Internet would lead to increased use of
P&W paper. We do not find any evidence
of this effect in our analysis.
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Our results suggest that the effects of
income on the consumption of paper prod-
ucts vary with Internet adoption. In general,
the greater the Internet use, the less respon-
sive are newsprint and P&W paper demands
to increases in income. Although income
growth still increases the demand for paper
products in most regions of the world, we
find that this is no longer the case in the
United States. At the current rate of Internet
adoption, further increases in GDP per cap-
ita are expected to lower US demand for pa-
per products.
Our findings have implications for
forecasts of US consumption of paper
products. Such forecasts have been used
since the 1950s in outlook studies con-
ducted by various governments and agen-
cies (Hurmekoski and Hetemäki 2013).
The 1993 Forest and Rangeland Renew-
able Resources Planning Act (RPA) assess-
ment update (Haynes et al. 1995) was one
of the first such reports of the Internet age,
and it incorporated an ad hoc adjustment
of demand, accounting for future advertis-
ing in electronic media substituting for ad-
vertising in print media (Ince 1994). Al-
though this adjustment applied across
multiple paper products slowed the rate of
growth in future newsprint consumption, it
was not applied to most P&W paper grades
and thus did not have nearly as large an im-
pact on their projected demand growth. The
1999 FAO outlook report (Zhu et al. 1998)
forecasted steadily increasing newsprint and
P&W paper consumption from the mid-
1990s onward (Figure 3). This study did not
account for any effects of the Internet and
yielded results similar to those for our coun-
terfactual “no Internet” scenario (Figure 2).
The 2000 RPA report (Haynes 2003) fore-
cast slightly declining newsprint consump-
tion but rising P&W paper consumption.
Like the prior RPA update, Haynes (2003,
p. 74) states that the
projected trend for newsprint reflects an as-
sumption that newspaper consumption will
continue yielding to gradual substitution
by electronic news and advertising media.
In contrast, the rise in P&W paper con-
sumption reflected the finding from an
econometric analysis (Zhang 1995) that de-
mands for communication paper grades and
electronic media are complementary, imply-
ing that falling prices for computers would
increase demand for P&W paper. Based on
more recent data, we find that the Internet
and P&W paper are substitutes in the
United States. Thus, in our case, rising In-
ternet use reduces demand for P&W paper.
The most recent outlook studies are the
2010 Global RPA report (Buongiorno et al.
2012) and the 2010 FAO report (Prestemon
and Buongiorno 2012), which include the
same forecast for newsprint and P&W pa-
per, beginning in 2006. Newsprint con-
sumption was forecast to decline slightly,
similar to the 2000 RPA projection, whereas
forecasted P&W paper consumption as es-
sentially flat (Figure 3). To account for ef-
fects of the Internet on paper consumption,
controls were included for advertising
spending in print and electronic media (Ince
et al. 2011).
It is evident from Figure 3 that previous
outlook studies have not accounted for all of
the factors behind the recent drop in US
consumption of newsprint and P&W paper.
Although these studies control to varying
degrees for the influence of electronic media,
the results of our study suggest that rates of
Internet adoption may be the critical vari-
able. We find that by including per capita
Internet use and the interaction of Internet
use with GDP in our demand models, we
can capture the recent declines in US con-
sumption of newsprint and P&W paper.3
Therefore, we recommend that authors of
future outlook studies consider using our
demand estimates for newsprint and P&W
paper that are based on Internet adoption
rates. Although regional results are useful, it
would also be valuable to better understand
Internet use and the implications for paper
consumption at less aggregate scales. In
particular, household-level studies (e.g.,
Goldfarb and Prince 2008) could be done
to examine how Internet adoption affects
substitution among goods, including pa-
per products, and identify the important
determinants of these choices. Finally,
newsprint and P&W paper are not the
only forest products experiencing changes
in consumption patterns (Wear et al.
2016). Continual reevaluation and updat-
ing of methods used to understand such
changes across all forest products are nec-
essary to craft effective forest policy and
management outcomes.
Endnotes
1. For the regions we consider, paper production
is a small component of GDP, justifying our
treatment of GDP as an exogenous determi-
nant of paper demand.
2. In the case of the price variable, the estimated
elasticity is simply ␤1. Because the Internet
and GDP variables enter the model on their
own and interacted with each other, their total
effect depends on multiple parameters and the
levels of independent variables.
3. It is important to note that all of the fore-
casts in Figure 3 were completed before the
recession beginning in 2007. Thus, the in-
ability of these studies to forecast the steep
decline in consumption after 2006 may be
due to their use of inflated GDP values. To
make sure that the decline in our fitted line
in Figure 3 is not simply the result of our
using actual GDP values, we recalculated
the fitted line after 2006 using the GDP
values from the 2010 RPA (see Ince et al.
2011). We obtain similar results.
Supplemental Podcast
This article includes a podcast interview
with author Greg Latta. Visit the online ver-
sion of this article to listen to the podcast.
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