The Effect of Socio-Economic Dimensions on Deforestation: Application of Spatial Econometrics

In the second half of the twenty-first century, economic change, population growth and globalization were the main factors driving the deforestation in the South Asian countries. To identify the effects due to socio-economic factors affecting deforestation in such countries, this study applied the spatial econometrics model based on data from 18 selected countries for the period between 2005 and 2015. The spatial correlation tests were showing that ignoring the effects of spatial correlation cause bias in results. The results of the model also confirmed the environmental Kuznets curve hypothesis for the selected countries with a turning point of $ 5,107. Our findings illustrated that increasing GDP per capita in neighbouring countries through interregional mobility of inputs of production will increase deforestation in the target country. The increase in the exchange rate in neighbouring countries due to the increase in imports of forest products and the non-cutting of domestic forest resources will reduce deforestation in the target country. Increased population density and unemployment in neighbouring countries due to reduced job opportunities and increased migration to the target country, followed by increased demand for food and increased land demand, led to increased deforestation in the target country. Finally, increasing the human development index variable has reduced deforestation in the target country. However, changing this variable in neighbouring countries has not affected the deforestation of the target country. Therefore, in a world with increasing economic growth, it is suggested that to prevent deforestation by improving the human development index, eradicating the problem of unemployment, and eradicating poverty redouble efforts. As the results of this study showed, the population had a direct and significant effect on deforestation in selected countries. Due to the increase in population growth in different years, it is recommended that the population issue be given more attention by looking at the requirements of sustainable development to reduce environmental degradation, mainly deforestation. Because according to the results of this study, the lack of rapid population growth reduces deforestation in selected countries.