Chart 9: Distribution of scores in the case of VFL
In both cases it can be well observed that due to the linearity in the relationship between market and industry size
and benefits and the enormous difference in size between Brazil and the rest of the Latin-American countries leads
to the result that Brazil always by default receive the maximum score while the rest of the Latin-American countries,
even though they are not really small reach only a minor score. So for example countries such as Argentina reach
only a score of 20 out of a 100 and in the case of the Central American countries; the final score is by default 5. This
leads to an additional problem, that there is no differentiation possible anymore between smaller countries, such as
Belize, which indeed have no market and no forest resource, and already small- to medium-sized countries, such as
Honduras for instance, which have a comparatively important forest sector.
A solution to the mentioned problem could be to realize a data transformation by applying the natural logarithm to
the absolute numbers found for the different countries. The effects of applying the natural logarithm on the absolute
numbers curve are shown in Chart 10 and 11. In both cases, additional capacities in resources have a decreasing
marginal benefit. On the lower levels, therefore, additional resource from changes in land use definitely lead to a
change in the score achieved, while having already huge extension in forest use, an additional unit of forest does not
necessarily lead to a relevant change in the attractiveness of the sector.
Convention