A Longitudinal Study on the Drivers of Forestation

This paper studies the effects of population growth, income levels, and governance on forestation using longitudinal data covering 161 countries from 1996-2015. The study begins with a review of the empirical literature on deforestation and preservation of environmental quality. Then, we conduct our own empirical analysis through log differencing and analysis of annual percentage changes in forest area. We find evidence that these factors matter, but that the relationships are weak. The estimated effects do differ between our groupings of countries with regard to income levels as well as forest area sizes. Population growth generally leads to a reduction in forest area. Conversely, rising incomes slow deforestation and increase the chances of reforestation and afforestation. We witness the disappearance of a Kuznets curve relationship across all groups after individual country effects are included. A bettering of perceived rule of law, political stability, and reduction in corruption is also correlated with more positive forestation rates