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The Dynamics Of Land-Use In Brazilian Amazon

Listed author(s):
  • Paulo R. A. Loureiro

    ()

    (Departamento de Economia (Department of Economics) Faculdade de Economia, Administração, Contabilidade e Ciência da Informação e Documentação (FACE) (Faculty of Economics, Administration, Accounting and Information Science) Universidade de Brasília)

  • Adolfo Sachsida

    (Instituto de Pesquisa Econômica Aplicada– IPEA)

  • Mário Jorge Cardoso de Mendonça

    (Instituto de Pesquisa Econômica Aplicada– IPEA)

This paper studies the dynamics of land-use in the Brazilian Amazon using a structural vector autoregressive (SVAR) model. The heterogeneity in the data is controlled by mean of fixed effect panel specification. Meanwhile, spatial autocorrelation is also diagnosed by a statistical methodology that allows to us to split the model in subsamples (clusters) of more homogenous municipalities in order to re-estimate the model on separate clusters. The clustering analysis shows that there are three clusters whose land-use patterns are strongly different in an economical point of view. The first cluster identifies the pioneer fronts; dedicated to logging, natural resources exploitation and slash-and-burn cultures, the second cluster have grown a more diversified agriculture while the third cluster presents most developed, intensive agriculture oriented municipalities. Another distinctive feature of this article pertains to the assessment of the contemporaneous causal order that exists among distinct land-uses. This permits to evaluate the succession dynamics that derive from unexpected innovations in the process of soil occupation by means of impulse response functions (IRFs). The IRFs applied for cluster 1 lead to the following results: (1) the new demand for cropping requires to clear new areas of forest. This extra cleared land will be transformed in pasture land or fallow in the long term. This process can be considered a necessary outcome of the slash-and-burn agriculture, a common practice in the Amazon; (2) Contrary to other studies we do not find evidence that cattle ranching is the primary driver of deforestation; (3) the impact of a shock of pasture land on itself is virtually null at the beginning but it augments substantially over time not requiring to clear extra areas of forest land but rather competing with crop land, and (4) it seems that if not for all the Amazon Basin, at least in this cluster, cattle ranching and cropping could be competitive activities.

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File URL: http://e-groups.unb.br/face/eco/textos/didaticos/WP%20342.pdf
File Function: First version, 2010
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Paper provided by Departamento de Economia da Universidade de Brasilia in its series Working papers - Textos para Discussao do Departamento de Economia da Universidade de Brasilia with number 342.

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Length: 41 pages
Date of creation: Nov 2010
Handle: RePEc:brs:wpaper:342
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Universidade de Brasília UnB - Campus Universitário Darcy Ribeiro Asa Norte CEP 70910-900, Brasília, Brasil

Phone: 55-61-3107-6704
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Web page: http://e-groups.unb.br/face/eco/
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  1. R Blundell & Steven Bond, "undated". "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
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  7. Vosti, Stephen A. & Braz, Evaldo Munoz & Carpentier, Chantal Line & d'Oliveira, Marcus V. N. & Witcover, Julie, 2003. "Rights to Forest Products, Deforestation and Smallholder Income: Evidence from the Western Brazilian Amazon," World Development, Elsevier, vol. 31(11), pages 1889-1901, November.
  8. David A. Bessler & Seongpyo Lee, 2002. "Money and prices: U.S. Data 1869-1914 (A study with directed graphs)," Empirical Economics, Springer, vol. 27(3), pages 427-446.
  9. Andersen,Lykke E. & Granger,Clive W. J. & Reis,Eustaquio J. & Weinhold,Diana & Wunder,Sven, 2002. "The Dynamics of Deforestation and Economic Growth in the Brazilian Amazon," Cambridge Books, Cambridge University Press, number 9780521811972, December.
  10. Rothenberg, Thomas J, 1971. "Identification in Parametric Models," Econometrica, Econometric Society, vol. 39(3), pages 577-591, May.
  11. Weinhold, Diana, 1999. "Estimating the loss of agricultural productivity in the Amazon," Ecological Economics, Elsevier, vol. 31(1), pages 63-76, October.
  12. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
  13. Arellano, Manuel, 2003. "Panel Data Econometrics," OUP Catalogue, Oxford University Press, number 9780199245291.
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