By Frank Harrigan
In: Journal of Policy Modeling (2000), 491-531.
Note by Nobuhiro Hosoe
Evaluating effects of tropical forest conservation on Malaysian income.
Baseline:
Lumber harvests are kept stationary at 1990 level.
(Even if so, the lumber stock will continue to decline at a rate of 2% p.a.)
Counter-factual run:
The harvests decline at a rate of 8% p.a.
(Still, we cannot increase the lumber stocks.)
Financial CGE Model
1990-1999
Adaptive expectation
13 commodities (lumber, tree crops, other agricultural, resource-based manufacturing, export oriented, domestic, construction, dwellings, public services, private services, utilities, oil and gas, and other mining.)
Capital and land --- to be a Hicks composite factor --- quasi-fixed
Labor
Skill types: Unskilled, semiskilled, and professional and skilled
Activities: Land-based, non-land-based --- Migration caused by gaps of unemployment rates and wage rates
CRTS production functions only
Constant GDP growth rates are assumed at 8% p.a. by setting exogenous parameters (???).
Evaluate income losses in 10 years with CV
CV is actually quantified as the magnitude of unrequited transfers from the ROW.
Indeed, the decline of lumber harvests would harm income temporally, adjustments (i.e., factor reallocation from the lumber and its related sectors to others) would recover 65% of direct losses.
Many typos are found in appendix, particularly notations for Greek letters. Be careful.