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On the effects of wildfires on poverty in Bolivia

Author

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  • Canavire-Bacarreza, Gustavo
  • Puerta-Cuartas, Alejandro
  • Ramos, Andrey

Abstract

This paper examines the impact of wildfire events on poverty and the labor market in Bolivia. To this end, we match data from NASA’s MODIS Collection-6 MCD64A1 burned area product with household surveys for the period 2005–2020. Similar neighboring municipalities are clustered using the max-p-region algorithm to achieve survey representativeness at granular geographical levels. The causal effects of wildfire events on poverty, household per capita income, and agricultural income are estimated using the Interactive Fixed Effects Counterfactual Estimator. We find a significant short-term increase in poverty following a wildfire event, explained by a temporary decline in household per capita income and agricultural labor income. This paper contributes to enhancing our understanding of how wildfires affect labor markets in developing economies.

Suggested Citation

  • Canavire-Bacarreza, Gustavo & Puerta-Cuartas, Alejandro & Ramos, Andrey, 2025. "On the effects of wildfires on poverty in Bolivia," Journal of Development Economics, Elsevier, vol. 175(C).
    • Handle: RePEc:eee:deveco:v:175:y:2025:i:c:s0304387825000458
    DOI: 10.1016/j.jdeveco.2025.103494
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    References listed on IDEAS

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    1. Nielsen-Pincus, Max & Moseley, Cassandra & Gebert, Krista, 2014. "Job growth and loss across sectors and time in the western US: The impact of large wildfires," Forest Policy and Economics, Elsevier, vol. 38(C), pages 199-206.
    2. Juan C. Duque & Luc Anselin & Sergio J. Rey, 2012. "The Max-P-Regions Problem," Journal of Regional Science, Wiley Blackwell, vol. 52(3), pages 397-419, August.
    3. Laurent Gobillon & Thierry Magnac, 2016. "Regional Policy Evaluation: Interactive Fixed Effects and Synthetic Controls," The Review of Economics and Statistics, MIT Press, vol. 98(3), pages 535-551, July.
    4. Canavire-Bacarreza, Gustavo & Duque, Juan Carlos & Urrego, Joaquin A., 2016. "Moving Citizens and Deterring Criminals: Innovation in Public Transport Facilities," Research Department working papers 978, CAF Development Bank Of Latinamerica.
    5. Jushan Bai, 2009. "Panel Data Models With Interactive Fixed Effects," Econometrica, Econometric Society, vol. 77(4), pages 1229-1279, July.
    6. Imai, Kosuke & Kim, In Song, 2021. "On the Use of Two-Way Fixed Effects Regression Models for Causal Inference with Panel Data," Political Analysis, Cambridge University Press, vol. 29(3), pages 405-415, July.
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    More about this item

    Keywords

    Poverty; Counterfactual estimators; Wildfires; Natural disasters;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets

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