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Introducing Forest Access Cost Functions into a General Equilibrium Model

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  • Gouel, Christophe
  • Hertel, Thomas

Abstract

The purpose of this Research Memorandum is to propose an approach to incorporating forest access cost functions into global general equilibrium models such as GTAP. Towards this end, we develop a long run access cost function which can be calibrated to national data on total forest land, currently inaccessible forest land, forest land rents, and expected rates of return on investment. This is illustrated for an 11 region aggregation of the GTAP-AEZ data base. We find that this long run function generates far too high a rate of annual access, and so we introduce a short run component which introduces a quadratic term into the cost function. This can be chosen to target current rates of forest access as reported by the FAO. Finally, we discuss the treatment of this new type of investment in the general equilibrium model.

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Bibliographic Info

Paper provided by Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University in its series GTAP Research Memoranda with number 2215.

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Date of creation: 2006
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Handle: RePEc:gta:resmem:2215

Note: GTAP Research Memorandum No. 08
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Cited by:
  1. Ujjayant Chakravorty & Marie-Hélène Hubert & Michel Moreaux & Linda Nøstbakken, 2012. "Do Biofuel Mandates Raise Food Prices?," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201214, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
  2. Chakravorty, Ujjayant & Hubert, Marie-Helene & Nostbakken, Linda, 2012. "The Long Run Impact of Biofuels on Food Prices," Working Papers 2012-11, University of Alberta, Department of Economics.
  3. Alvaro Calzadilla & Ruth Delzeit & Gernot Klepper, 2014. "DART-BIO: Modelling the interplay of food, feed and fuels in a global CGE model," Kiel Working Papers 1896, Kiel Institute for the World Economy.
  4. Ujjayant Chakravorty & Marie-Hélène Hubert & Beyza Ural Marchand, 2012. "Food for Fuel: The Effect of U.S. Energy Policy on Indian Poverty," CESifo Working Paper Series 3910, CESifo Group Munich.

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