Across the country, trees are disappearing in cases that are often small in scale but largely unsettling, probably prompted by the rise in timber value and the increase in worldwide demand for American hardwood — particularly from builders in Europe and China. The total value of the American log export market has more than doubled since 2000, industry experts said, and it continues to grow.
In the United States, forests are not being illegally logged on a systemic scale, ... Here, the issue is often scattered and intimate, and often affects homeowners, parks and public forests.
From Wikipedia (so it's totally wrong):
Through Rational Choice Theory, Cornish and Clarke (1986) describe crime as an event that occurs when an offender decides to risk breaking the law after considering his or her own need for money, personal values or learning experiences and how well a target is protected, how affluent the neighbourhood is or how efficient the local police are. Before committing a crime, the reasoning criminal weighs the chances of getting caught, the severity of the expected penalty, the value to be gained by committing the act, and his or her immediate need for that value.
Obviously, an increase in a tree's price gives me an incentive to go on my neighbor's property and cut the tree down. Since the problem is "scattered and intimate", with limited monitoring and enforcement, an efficient deterrent is a challenge.
Instead, I suggest we take a cue from behavioral economics and focus on the intimacy problem. Again, from Wiki:
An intimate relationship is a particularly close interpersonal relationship. It is a relationship in which the participants know or trust one another very well or are confidants of one another, or a relationship in which there is physical or emotional intimacy.
So, first of all, the person you most trust is likely to steal your trees. Second, if you value your trees, don't become physically or emotionally involved. If you do become so involved, beware. Back to the article:
“There were a lot of nights spent worrying, and when I’d get up, I’d just see bare stumps,” said Mr. Spaulding, who was awarded about $30,000 for the tree loss in a civil lawsuit against his neighbor last month. “The wood was sold for lumber. And he didn’t leave much very good.”
This last quote brings us back to the economic theory of crime, sans social psychology:
“It’s getting so much worse that I’d say in every county in Kentucky we have timber theft issues,” said Dea Riley, executive director of the Appalachian Roundtable, which provides resources and legal help to victims of tree rustlers. “So many more people are showing up to say, ‘Hey, my timber got stolen.’ The phone just hasn’t stopped ringing. We have a waiting list of victims that we won’t get to in a year.”
Personal note: Every county? Even Oldham?
Data on timber theft is hard to come by because, experts say, much of it goes unreported, and many states lump it with other crimes under general property theft handled at the local level. Advocates in some states, like Ms. Riley and others in Kentucky, are trying to stiffen penalities.
Here is my risk-and-uncertainty-ignorant proposal for the efficient fine:
Fine = (d x V)/p
where d is the criminal's risk-loving parameter, V is the value of the trees and p is the probability of getting caught stealing trees.
There must be some thrill to stealing trees, so let's say the risk-loving parameter is greater than one (if it is less than one, the criminals' are risk-averse). The probability of getting caught is likely low, so both of these parameters significantly increase the efficient fine above the market value of trees. As an example, suppose d = 1.5 and p = .10. For every dollar of market value, the efficient fine should be multiplied by 15. If the trees are sold for $10,000 then the fine should be $150,000.
I have no empirical support for this nonsense, but this is what I'd argue if I was on the jury. I'd also suggest a short prison sentance, for violating the trust of your confidant.