MODEL OF THE PETROCHEMICAL INDUSTRY.

A regionally disaggregated model of the world market for each of some 23 basic, intermediate, and final petrochemical products is specified and estimated, and its usefulness illustrated by way of an analysis of potential market prospects for new producers of petrochemical products in the Japanese market. Despite a number of data limitations and a relatively small sample, the estimates are generally very satisfactory according to a standard goodness-of-fit criteria. Moreover, when combined with information about the prospective behavior of Japanese petrochemical producers, the forecasts tell an interesting story about future developments in Japanese petrochemical markets.