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© 1985 Oxford University Press and the Foundation for the European Review of Agricultural Economics

other

The pricing of pulpwood and spatial price discrimination: Theory and practice

KARL GUSTAF LÖFGREN*

Department of Forest Economics, Swedish University of Agricultural Sciences Umeå, Sweden

Received October 1, 1984;

Summary

The purpose of this paper is to analyse the actual price list in a segment of the Swedish pulpwood market (Price Region 1) in terms of the theory of the spatial monopsony. It is argued that the recent construction of the price list is not inconsistent with an a priori hypothesis about a spatial monopsony facing an, according to empirical data, concave supply curve. A few qualifications are necessary; one is that the Swedish forest-owners have not actively protested against the creation of the ‘price list’. It is shown, however, that the chosen price policy may well be mutually advantageous in relation to adjacent alternatives.


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