 The pygmy three @-@ toed sloth was first described by Robert P. Anderson of the University of Kansas and Charles O. Handley Jr . , of the Smithsonian Institution in 2001 . The researchers noted that the three @-@ toed sloths endemic to Isla Escudo de Veraguas , a small island off the coast of Panama , are significantly smaller than those that occur on the nearby outer islands of Bocas del Toro Province . Moreover , they differ from other populations in terms of pelage and cranial characteristics . Hence , they considered the three @-@ toed sloths in Isla Escudo de Veraguas to be an independent species and formally described it from the skin and skull of an adult female . The researchers further pointed out that Isla Escudos de Veraguas is the oldest island and located farthest from the mainland , that began breaking up into small islands due to rises in sea levels 10 @,@ 000 years ago . They proposed that this species evolved from an isolated population that had originated from the mainland population of brown @-@ throated three @-@ toed sloths ; it gradually differentiated enough to become an independent species through insular dwarfism . In another study the following year , the researchers observed that the mean body size of three @-@ toed sloths on an island decreases linearly as the age of the island increases ; the area of the island and the distance from the mainland , however , do not appear to significantly affect dwarfing . 
