Economic Impact of Institutions on the Consumption of Forest Products in India

The paper analyses the impact of forest institutions and economic liberalisation of the 1990s on the consumption of forest products and in turn on forest conservation. It is hypothesised that the forest institutions (1) Forest Conservation Act of 1980, and (2) National Forest Policy of 1988, (3) the economic liberalisation and (4) real gross national product (GNP) have perceptible influence on the consumption of forest products and forest conservation. The time series data on apparent consumption of forest products (production plus imports minus exports) as detailed in the FAO Yearbook of Forest Products and the real GNP from 1971 to 2009 form the data base for this study. The transcendental and quadratic consumption functions are used to derive income elasticity of consumption for various forest products of India using time series data from 1971 to 2009. The results indicate that the impact of both forest and economic institutions has led to increase in the consumption of 14 forest products forming 67 per cent (of 21 forest products). For these products the imports are substantial and are the prima facie indicators of the role of economic institution such as liberalisation, which lead to substantial imports and reduced domestic supplies due to institution of forest conservation.

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Journal Article
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Indian Journal of Agricultural Economics, 68, 2
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JEL Codes:
Q21; Q23; Q17; C22

 Record created 2017-04-01, last modified 2020-10-28

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