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International timber markets and tropical deforestation: the evidence from prices

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  • Ariaster B. Chimeli
  • Roy G. Boyd
  • Darius M. Adams

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.

Suggested Citation

  • Ariaster B. Chimeli & Roy G. Boyd & Darius M. Adams, 2012. "International timber markets and tropical deforestation: the evidence from prices," Applied Economics, Taylor & Francis Journals, vol. 44(10), pages 1303-1314, April.
  • Handle: RePEc:taf:applec:44:y:2012:i:10:p:1303-1314
    DOI: 10.1080/00036846.2010.539545
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    References listed on IDEAS

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    1. Varangis, Panos, 1990. "How integrated are tropical timber markets?," Policy Research Working Paper Series 465, The World Bank.
    2. Serena Ng & Pierre Perron, 2001. "LAG Length Selection and the Construction of Unit Root Tests with Good Size and Power," Econometrica, Econometric Society, vol. 69(6), pages 1519-1554, November.
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