Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Lunyu Xie Forest Stock And Harvest In China After The


Published on

Published in: Technology, Business
  • Be the first to comment

  • Be the first to like this

Lunyu Xie Forest Stock And Harvest In China After The

  1. 1. Forest Stock and Harvest in China after the Reform By Peter Berck, Lunyu Xie and Jintao Xu We thank the S.J.Hall Fund
  2. 2. Outline <ul><li>Background </li></ul><ul><li>Research Question </li></ul><ul><li>Theory </li></ul><ul><li>Data </li></ul><ul><li>Empirical Tests </li></ul><ul><li>Results </li></ul><ul><li>Conclusion </li></ul>
  3. 3. Background <ul><li>1950-1960 Consolidation of forest and agricultural land into state and collective management </li></ul><ul><li>1981 Three Fixes Policy; Agricultural and forest land tenure reform </li></ul><ul><li>1980s Fujian Province explores alternative path of shareholding system </li></ul><ul><li>2002 Rural Contract Law introduced </li></ul><ul><li>2003 Resolution on Development of Forestry adopted; Fujian Province decentralizes collective forests </li></ul><ul><li>2004-2007 Ten additional provinces announce new round of forest land tenure reforms </li></ul><ul><li>2006 New Countryside Development Initiative announced </li></ul><ul><li>2008 National guideline on forest tenure reform to be issued by State Council </li></ul>
  4. 4. Question of Interest <ul><li>Do private forest owners behave as present value maximizers ? </li></ul><ul><li>If so, what changes in rotation age, harvest and volume do we expect to see? </li></ul>
  5. 5. Theory <ul><li>The main economic facts that count for differences in treatment between government and private ownership </li></ul><ul><ul><li>Interest rate </li></ul></ul><ul><ul><li>External values </li></ul></ul><ul><ul><li>costs </li></ul></ul><ul><li>We expect a shorter rotation period, and a higher harvest associated with a higher volume when private </li></ul>
  6. 6. Data * * * * * Households * * Cell phone * * Phone * * * * * Income * * * Permit * * Labor Force * * Land * * * * * Population * * * * * * * * * Forest Land * * * * * * * * * Volume * * * Harvest 2005 2004 2003 2002 2001 2000 1995 1990 1985
  7. 7. Empirical Tests <ul><li>We estimated growth and harvest as a function of volume and other covariates </li></ul><ul><li>We expect that most villages will have average volumes that exhibit strong and positive net growth. </li></ul><ul><li>We expect that harvest will be increasing with volume, but household characteristics will not matter. </li></ul>
  8. 8. <ul><li>Two regressions: </li></ul><ul><ul><li>Growth function, to compare the marginal growth with an interest rate and predict the growth classes that will be harvested </li></ul></ul><ul><ul><li>Harvest function, to see what the relation is between harvest and volume and household characteristics. </li></ul></ul>
  9. 9. <ul><li>Growth function </li></ul><ul><ul><li>Regress annual growth G on the beginning of the period volume in m 3 /mu </li></ul></ul><ul><ul><li>G is calculated for the 2002-03 and 2004-2005 intervals as the change in volume plus harvest </li></ul></ul><ul><ul><li>Number of observations is 66 and R square is 0.32 </li></ul></ul>-4.4994*** (0.5706) 0.8829*** (0.2362) -.0538 *** (0.01940) constant vol vol 2 log(G)
  10. 10. <ul><li>Growth and the slope of growth </li></ul>
  11. 11. <ul><li>Harvest regression </li></ul><ul><ul><li>Tobit with instrumental variables </li></ul></ul><ul><ul><li>Percentage of phone use as an instrument </li></ul></ul><ul><li>Many plausible regressions </li></ul><ul><li>Consistent positive value of the coefficients on volume, ranging from 0.013-0.028 </li></ul><ul><li>Household characteristics are not significant </li></ul><ul><ul><li>Number of observations is 69. </li></ul></ul>0.0293884 (0.2538027) 5.75e-06 (0.0000924) -0.1958474 (0.1865536) 0.0124005* (0.0066224) 0.026532 (0.2322212) 4.14e-07 (0.0000648) -0.1845147 (0.1474787) 0.0665504 (0.1715402) -0.0348751 (0.0641979) 0.012671** (0.0051543) constant income ppd laborp workoutp vol yh
  12. 12. <ul><li>Alternative identification: lagged variables. </li></ul><ul><li>Results are broadly consistent with previous. </li></ul><ul><ul><li>Number of observations is 32 </li></ul></ul>-0.0984967 ( 0.0797639 ) 0.0401263 *** (0.0154786) -0.0779717 0.1470662 0.0000275 (0.0000437) 0.0229257 * (0.0136693 ) 0.0029956 (0.195711) 0.0000292 (0.0000606) -0.0613472 (0.1771524) -0.0740891 (0.151716) -0.2308471 (0.5443996) 0.0205537 (0.0160033) constant income00 laborp00 workoutp00 ppd05 vol04 sharvest05
  13. 13. <ul><li>Household characteristics are not significant in any formula </li></ul><ul><li>Likelihood Ratio test does not reject zero for all of them </li></ul><ul><li>No evidence that the households act differently than firms </li></ul>
  14. 14. <ul><li>Prediction of harvest </li></ul><ul><ul><li>A censored value of harvest prediction given the observations of all independent variables </li></ul></ul><ul><ul><li>Use the sample mean value for all but the volume </li></ul></ul><ul><ul><li>When volume increase 1 cubic meter, harvest increases 0.2 cubic meters. </li></ul></ul>
  15. 15. <ul><li>Test the different harvest behavior of village and private ownership </li></ul><ul><ul><li>Regress harvest on the private volume and non-private volume </li></ul></ul><ul><ul><li>Test for whether the coefficients are equal. </li></ul></ul><ul><li>Get the different coefficients, but not significantly different. </li></ul><ul><li>One explanation could be that most fruit trees are in private hands, and we don’t distinguish them from timber trees in our data for private percentage </li></ul><ul><ul><li>Number of observations is 156 </li></ul></ul>-.1131343*** .0395075 0.0271118** 0.0111501 0.03214*** 0.0066054 constant (1-%private) * volume %private * volume harvest
  16. 16. Future research <ul><li>Puzzle : growth, even for high volume villages, is above the predicted harvest. </li></ul><ul><ul><li>It does not appear likely that volume will increase without bound </li></ul></ul><ul><ul><li>We are examining these functions further, hope to find that harvest function has greater upwards slope. </li></ul></ul><ul><li>In terms of optimal management, we want to know the value of trees as a function of volume. Are villages with higher volumes producing for sawtimber where the lower volume villages are mainly producing for polewood, firewood, etc.? </li></ul>
  17. 17. Conclusion <ul><li>The growth rate peak is 0.9 m 3 /mu at a volume of 8 m 3 /mu,so we expect to find most villages with volumes below that number and our data does support it. </li></ul><ul><li>The data do not contradict the idea that the plots are managed in the way a competitive firm would manage them. </li></ul><ul><li>The data on harvest does support that harvest increase with volume. However, the predicted increase is not enough to counter growth. </li></ul><ul><li>Harvest increases differently with private volume and with non-private volume, but not significantly. </li></ul>