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International timber markets and tropical deforestation: the evidence from prices
Authors:Ariaster B. Chimeli  Roy G. Boyd  Darius M. Adams
Affiliation:1. Department of Economics , Ohio University , 313 Bentley Annex, Athens, 45701 OH, USA chimeli@ohio.edu;3. Department of Economics , Ohio University , 313 Bentley Annex, Athens, 45701 OH, USA;4. Department of Forest Resources , Oregon State University , Corvallis, USA
Abstract:Some scholars suggest that global timber markets, especially those involving high value species, are a leading cause of tropical deforestation. Despite limited empirical evidence, this hypothesis rests on the assumption that global timber markets respond to a common equilibrating mechanism that provides strong enough incentives for loggers in the tropical regions of the world. This article develops a simple model and taps into a unique data set on timber prices of hardwood and softwood in leading markets to test the global timber markets hypothesis. While we find evidence of a global equilibrating mechanism with potentially significant economic incentives to affect tropical deforestation, our results do not endorse the common conjecture in the literature that timber price shocks in developed countries lead to a homogeneous response in terms of deforestation everywhere in the tropical world. Instead, they invite further development of structural global timber market models to assess the linkages between markets and the consequences of such linkages to deforestation.
Keywords:defined benefits  Sweden  transparency  USA
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