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Don Fullerton

Don Fullerton, CESifo guest in June 2014

"What Drives Forest Leakage?"

Setting aside forested land for protection in one location can lead to deforestation elsewhere, defined as "leakage". Under some conditions, however, it can induce more forest cover near the protected area ("negative leakage").

During his visit to CESifo from mid-June to mid-July, Don Fullerton will be working to develop an analytical general equilibrium model to solve for leakage as a function of key economic variables, and then use it to generate testable hypotheses. Together with co-authors Kathy Baylis of Illinois and Payal Shah of the Okinawa Institute of Science and Technology, they will test these hypotheses for Indonesia using landsat data from 2000 and 2010 – before and after eight new national parks were protected in 2004.

The paper will estimate how deforestation near these parks compared to other unaffected areas depends on local economic characteristics. To take the spatial nature of deforestation into account, they will generate counterfactuals by matching over characteristics of the parcel itself and of its neighbors. Conservation agents and social planners can use these results to choose locations of protected areas to help maximize total tree cover.

Don Fullerton received a BA from Cornell in 1974 and a PhD in Economics from U.C. Berkeley in 1978. He taught at Princeton University (1978-84), the University of Virginia (1984-94), Carnegie Mellon University (1991-94) and the University of Texas (1994-2008), before joining the University of Illinois in 2008. From 1985 to 1987, he served in the U.S. Treasury Department as Deputy Assistant Secretary for Tax Analysis.

At Illinois, he is Gutgsell Professor in the Finance Department and Center for Business and Public Policy, and he is Associate Director of the Institute of Government and Public Affairs (IGPA). He was Managing Editor for the B.E. Journal of Economic Analysis & Policy (2001-2012), and is Director of the National Bureau of Economic Research (NBER) program on Environmental and Energy Economics (2007-present).