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The economics of cropland conversion in Amazonia: The importance of agricultural rent

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Author Info

  • Mann, Michael L.
  • Kaufmann, Robert K.
  • Bauer, Dana
  • Gopal, Sucharita
  • Vera-Diaz, Maria Del Carmen
  • Nepstad, Daniel
  • Merry, Frank
  • Kallay, Jennifer
  • Amacher, Gregory S.

Abstract

We use spatially efficient logit models to explore the role of economic incentives on the expansion of cropland in the Mato Grosso region between 2001 and 2004. An empirical measure for agricultural economic rent is used to quantify the desirability of a particular plot of land, which previous research proxies with variables such as distance to roads or urban areas, and simple climatic and edaphic variables. Results indicate that the measure for economic rent provides additional information and explanatory power to one of the most commonly used proxies, distance to roads. As predicted by economic theory, it is not simply access or variation in transportation costs that drives the spatial determinants of agricultural expansion, but the expected total returns from the venture. This suggests that spatially explicit rent models can be used to simulate the location and quantity of land-use change in an economically consistent framework. Such a framework lays the foundation for an enhanced methodology that can evaluate the ability of fiscal policy levers to influence the location of agricultural conversion with the ultimate aim of balancing economic and environmental goals.

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Bibliographic Info

Article provided by Elsevier in its journal Ecological Economics.

Volume (Year): 69 (2010)
Issue (Month): 7 (May)
Pages: 1503-1509

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Handle: RePEc:eee:ecolec:v:69:y:2010:i:7:p:1503-1509

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Web page: http://www.elsevier.com/locate/ecolecon

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Keywords: Land-use change Economics Spatial econometrics Policy analysis;

References

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  1. Newey, Whitney K & West, Kenneth D, 1987. "A Simple, Positive Semi-definite, Heteroskedasticity and Autocorrelation Consistent Covariance Matrix," Econometrica, Econometric Society, vol. 55(3), pages 703-08, May.
  2. Chomitz, Kenneth M & Gray, David A, 1996. "Roads, Land Use, and Deforestation: A Spatial Model Applied to Belize," World Bank Economic Review, World Bank Group, vol. 10(3), pages 487-512, September.
  3. Alexander Pfaff & Juan Robalino & Robert Walker & Steven Aldrich & Marcellus Caldas & Eustaquio Reis & Stephen Perz & Claudio Bohrer & Eugenio Arima & William Laurance & Kathryn Kirby, 2007. "Road Investments, Spatial Spillovers, And Deforestation In The Brazilian Amazon," Journal of Regional Science, Wiley Blackwell, vol. 47(1), pages 109-123.
  4. Vera-Diaz, Maria del Carmen & Kaufmann, Robert K. & Nepstad, Daniel C. & Schlesinger, Peter, 2008. "An interdisciplinary model of soybean yield in the Amazon Basin: The climatic, edaphic, and economic determinants," Ecological Economics, Elsevier, vol. 65(2), pages 420-431, April.
  5. David R. Oglethorpe, 1995. "Sensitivity Of Farm Plans Under Risk-Averse Behaviour: A Note On The Environmental Implications," Journal of Agricultural Economics, Wiley Blackwell, vol. 46(2), pages 227-232.
  6. Conley, T. G., 1999. "GMM estimation with cross sectional dependence," Journal of Econometrics, Elsevier, vol. 92(1), pages 1-45, September.
  7. Pfaff, Alexander S. P., 1999. "What Drives Deforestation in the Brazilian Amazon?: Evidence from Satellite and Socioeconomic Data," Journal of Environmental Economics and Management, Elsevier, vol. 37(1), pages 26-43, January.
  8. Timothy Conley & Francesca Molinari, 2005. "Spatial correlation robust inference with Errors in Location or Distance," CeMMAP working papers CWP10/05, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  9. Robert K. Kaufmann & Seth E. Snell, 1997. "A Biophysical Model of Corn Yield: Integrating Climatic and Social Determinants," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(1), pages 178-190.
  10. Kenneth M. Chomitz & Timothy S. Thomas, 2003. "Determinants of Land Use in Amaz´┐Żnia: A Fine-Scale Spatial Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 1016-1028.
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Cited by:
  1. Stibniati Atmadja & Louis Verchot, 2012. "A review of the state of research, policies and strategies in addressing leakage from reducing emissions from deforestation and forest degradation (REDD+)," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 17(3), pages 311-336, March.
  2. Michael Mann & Robert Kaufmann & Dana Bauer & Sucharita Gopal & James Baldwin & Maria Del Carmen Vera-Diaz, 2012. "Ecosystem Service Value and Agricultural Conversion in the Amazon: Implications for Policy Intervention," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 53(2), pages 279-295, October.
  3. Yagi, Hironori, 2012. "Farm size and Distance-to-Field in Scattered Rice Field Areas:with Integration of Plot and Farm Data," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 125390, International Association of Agricultural Economists.
  4. Mann, Michael L. & Kaufmann, Robert K. & Bauer, Dana Marie & Gopal, Sucharita & Nomack, Mallory & Womack, Jesse Y. & Sullivan, Kerry & Soares-Filho, Britaldo S., 2014. "Pasture conversion and competitive cattle rents in the Amazon," Ecological Economics, Elsevier, vol. 97(C), pages 182-190.

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