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As the wild tiger population in tropical
Asia dropped from about 100,000 to 3,500 in the last
century, the need to conserve tiger habitats poses a
challenge for the Global Tiger Recovery Program. This paper
develops and uses a high-resolution monthly forest clearing
database for 74 tiger habitat areas in ten countries to
investigate habitat threats for Bengal, Indochinese, Malayan
and Sumatran tigers. The econometric model links forest
habitat loss and forest clearing to profitability
calculations that are affected by market expectations,
environmental conditions and evolving patterns of
settlement, among others. It uses new spatial panel
estimation methods that allow for temporal and spatial
autocorrelation. The econometric results emphasize the role
of short-run market variables, including the exchange rate,
real interest rate and prices of agricultural products in
forest clearing, with considerable variation in the
estimated timing for response and impact elasticities across
countries. The results highlight a critical message for the
conservation policy community: Changes in world
agricultural-product markets and national financial policies
have significant, measurable effects on tropical forest
clearing, with variable time lags and degrees of
responsiveness across countries. Measuring these effects and
pinpointing areas at risk can provide valuable guidance for
policymakers, conservation managers, and donor institutions.
