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Contagious development: Neighbor interactions in deforestation

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  • Robalino, Juan A.
  • Pfaff, Alexander

Abstract

We estimate neighbor interactions in deforestation in Costa Rica. To address simultaneity and the presence of spatially correlated unobservables, we measure for neighbors' deforestation using the slopes of neighbors' and neighbors' neighbors' parcels. We find that neighboring deforestation significantly raises the probability of deforestation. Policies for agricultural development or forest conservation in one area will affect deforestation rates in non-targeted neighboring areas. Correct estimation of the interaction reverses the naive estimate's prediction of multiple equilibria.

Suggested Citation

  • Robalino, Juan A. & Pfaff, Alexander, 2012. "Contagious development: Neighbor interactions in deforestation," Journal of Development Economics, Elsevier, vol. 97(2), pages 427-436.
  • Handle: RePEc:eee:deveco:v:97:y:2012:i:2:p:427-436
    DOI: 10.1016/j.jdeveco.2011.06.003
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    More about this item

    Keywords

    Instrumental variable; Neighbors' interactions; Local interactions; Social interactions; Land use patterns; Environmental policies;

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land

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