A model of the world wool textile market

Abstract

The thesis investigates world demand for wool and wool textiles over the period 1953 - 1967.

A deterministic process model comprising a series of eight linear equations and three identities traces demand from the consumer through all intermediate stages to demand for raw wool at the mill level. The variables exogenous to the system were national income, population, percentage annual change in world imports and exports, and wool and synthetic prices.

The model was used to forecast mill consumption of raw wool from 1968 - 1980. Results indicated that if wool becomes more expensive than synthetics, mill consumption of raw wool could stagnate or even decline. A higher annual percentage increase in world trade is seen to induce higher levels of mill consumption of raw wool, all other things being equal.

The conclusion reached from this study is that wool must be marketed as an industrial fibre rather than as a traditional agricultural commodity if competition from synthetics is to be met effectively.