Welfare impacts of tariff reduction of imported wood in Iran: Application of Quadratic Almost Ideal Demand System

Address to increasing demand for wood products and limited domestic resources, wood and wood products imports as one of the easily available and widespread ways in international context, is very important. Among the policy on the imported wood market that is evident, apply a tariff and non-tariff barriers. Know the reaction importers against the change priced is important to be determined and applied or reduction of these barriers. The objective of this paper is an empirical investigation of the QUAIDS for unprocessed, half-processed and processed wood imports and unprocessed domestic wood during 1982-2011. Also we calculate the Compensating Variation cause by reduction in tariffs. The results of study shows a substitution relation between imported woods and substitution relation between domestic and imported unprocessed wood as well as complementary relation between domestic unprocessed wood and imported half-processed wood and processed wood. Also Compensating Variation index shows by tariff reduction, change in Appliers expenditure for half-processed wood is higher than those of two others groups. Due to the use of the excessive harvesting of forests and assist tariff reduction to reduce the pressure on domestic forests, is recommended to reduce the tariffs based on temporal plan. This temporal plan is necessary be considered the possibility of compliance related industries. Also the tariff reduction according to requirements of WTO is important which IRAN is trying to join the organization. Thus it is proposed that the wood products as a whole to be managed by the same administrative system expecting to take into consideration the whole of wood market.