MDF is much cheaper to purchase up front than plywood because it is simpler to manufacture. Plywood is manufactured to look like hardwood, utilizing more wood and less adhesive, which is a costlier process. Variable costs of materials and labor, provided by individual contractors, will influence the final cost comparison.
Both MDF and plywood are considered durable building materials, although plywood is slightly more durable, often lasting between 30 years and the total life of the building. Plywood is less moisture resistant than MDF, however, and more susceptible to termite damage. Plywood may also have voids in the face or core, where MDF has none.
Most plywood and MDF is held together using formaldehyde, which the Environmental Protection Agency (EPA) has classified as a likely human carcinogen. The vapors given off from formaldehyde can potentially cause allergic reactions of the skin, respiratory illness and fatigue after prolonged inhalation. MDF has the potential to be a greener building material if made with a water-based non-toxic resin as its binder.