Improvements to the standard forest products trade model : illegal logging

• Main Author: Northway, Steven
• Language: English
• Published: University of British Columbia 2011
• Online Access: http://hdl.handle.net/2429/34736

This dissertation describes three improvements to the standard forest products trade model. The standard model typically contains multiple regions, multiple products, multiple manufacturing processes, price sensitive supply, price sensitive demand and transportation costs between regions. The models are used to predict sectoral economic activity and the trade of products among countries while contributing to policy creation, implementation and evaluation. The standard model has remained substantially unchanged since it was introduced in the early 1980s. This dissertation is organized into four manuscripts. The first and second manuscripts introduce structural improvements to the standard model. The first manuscript suggests replacing the standard manufacturing cost component with a theoretically coherent cost component based on variable marginal costs. The second manuscript suggests replacing the idiosyncratic use of trade inertia with the use of Armington elasticities. The third and fourth manuscripts lead to content improvements in the modeling of illegal logging. The third manuscript presents a background analysis that explores the causal links between a country’s development and corruption. The fourth and final manuscript utilizes the results of the three previous manuscripts in calibrating a revised trade model with special reference to illegal logging in Indonesia and its trade with China. This revised trade model incorporates the variable cost manufacturing component from the first manuscript, Armington elasticities from the second manuscript and predictions of corruption from the third manuscript.