He, WumengYue, JiahuaDeng, BoyaMao, Yuyao2024-04-222024-04-222024-04-21https://hdl.handle.net/10161/30508This paper provides a comprehensive analysis of the impact of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) on the importation of rosewood furniture in China. The research utilizes Chinese customs data from 2015 to 2022 and employs the Difference-in-Differences (DiD) method to evaluate changes in import patterns. Contrary to the expected decrease in rosewood imports due to trade restrictions, the study reveals a paradoxical surge in importation. This unexpected trend is explained through the lens of the Green Paradox theory, suggesting that the anticipation of future restrictions on resource extraction can lead suppliers to intensify their extraction and sale efforts in the short-term, resulting in an accelerated pace of resource extraction. The study identifies a clear seasonality pattern in rosewood imports, with low levels in the first quarter of the year and high levels in the subsequent quarters. This pattern is congruent with the marriage rate in China, indicating a cultural influence on resource consumption patterns. Furthermore, the research uncovers a potential substitution effect and investment shifts following the implementation of CITES regulations. Regulatory measures can alter the relative attractiveness of products, leading to unintended shifts in consumer and producer behavior. In the case of rosewood, making the resource scarcer or more difficult to legally acquire can enhance its desirability as a status symbol or investment, thereby driving up demand. This increased demand can have the perverse effect of making illegal trade more lucrative, further endangering the resource the policy aimed to protect. The study also highlights the limitations of the DiD approach, particularly the assumption that the treatment and control groups would have followed similar trends over time in the absence of treatment. The observed pre-treatment uptrend in the treatment group and the increase in post-treatment imports suggest that the DiD estimate might be biased or confounded by factors not controlled for in the model. In conclusion, this paper offers significant insights into the effectiveness of CITES regulations and their implications on resource extraction, market responses, and environmental conservation. These findings highlight the need for carefully designed policies that account for the complex dynamics between market behavior, economic principles, and environmental sustainability. Future policies should consider market dynamics, behavioral economics principles, and the unique characteristics of resources like rosewood to mitigate adverse impacts and ensure the intended conservation goals are achieved.en-USEnvironmental policyBehavioral economicsRosewood ImportCITESDifference-in-Differences (DiD)Master's project