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Deforestation, Development, and Government Policy in the Brazilian Amazon: an Econometric Analysis

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  • Lykke E. Andersen
  • Eustáquio J. Reis

Abstract

This paper develops a model of deforestation and economic development in the Amazon. It is based on the determinants of demand for agricultural land, i.e. on the interactions between population dynamics, urbanization and the growth of local markets, land prices, and government policies. The model is estimated using a panel data set covering 316 municipalities in the Brazilian Amazon during the period 1970/85. The model is used to evaluate the effects of different policy instruments. The trade-off between economic growth and deforestation is shown to be quite good for subsidized credit but very bad for new road building.

Suggested Citation

  • Lykke E. Andersen & Eustáquio J. Reis, 2015. "Deforestation, Development, and Government Policy in the Brazilian Amazon: an Econometric Analysis," Discussion Papers 0069, Instituto de Pesquisa Econômica Aplicada - IPEA.
    • Handle: RePEc:ipe:ipetds:0069
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    References listed on IDEAS

    as
    1. Deacon Robert T., 1995. "Assessing the Relationship between Government Policy and Deforestation," Journal of Environmental Economics and Management, Elsevier, vol. 28(1), pages 1-18, January.
    2. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    3. Lykke E. Andersen, 2015. "A Cost-benefit Analysis of Deforestation in the Brazilian Amazon," Discussion Papers 0065, Instituto de Pesquisa Econômica Aplicada - IPEA.
    4. Engle, Robert F, 1982. "Autoregressive Conditional Heteroscedasticity with Estimates of the Variance of United Kingdom Inflation," Econometrica, Econometric Society, vol. 50(4), pages 987-1007, July.
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    Cited by:

    1. Araujo, Claudio & Combes, Jean-Louis & Féres, José Gustavo, 2019. "Determinants of Amazon deforestation: the role of off-farm income," Environment and Development Economics, Cambridge University Press, vol. 24(2), pages 138-156, April.
    2. Andrea Chávez Michaelsen & Leticia Huamani Briceño & Ronny Fernandez Menis & Nemin Bejar Chura & Frank Valera Tito & Stephen Perz & I. Foster Brown & Sandro Domínguez Del Aguila & Raúl Pinedo Mora & G, 2013. "Regional Deforestation Trends within Local Realities: Land-Cover Change in Southeastern Peru 1996–2011," Land, MDPI, vol. 2(2), pages 1-27, April.
    3. Sébastien Marchand, 2011. "Technical Efficiency, Farm Size and Tropical Deforestation in the Brazilian Amazonian Forest," CERDI Working papers halshs-00552981, HAL.
    4. Jorge Hargrave Gonçalves da Silva, 2011. "Economic Causes ofDeforestation in the Brazilian Amazon: an Empirical Analysis of the2000s," Anais do XXXVII Encontro Nacional de Economia [Proceedings of the 37th Brazilian Economics Meeting] 190, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    5. Danilo Camargo Igliori, 2006. "Deforestation, Growth And Agglomeration Effects: Evidence From Agriculture In The Brazilian Amazon," Anais do XXXIV Encontro Nacional de Economia [Proceedings of the 34th Brazilian Economics Meeting] 102, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    6. Claudio Ferraz, 2015. "Explaining Agriculture Expansion and Deforestation: Evidence from the Brazilian Amazon – 1980/98," Discussion Papers 0106, Instituto de Pesquisa Econômica Aplicada - IPEA.
    7. Heagney, E.C. & Falster, D.S. & Kovač, M., 2021. "Land clearing in south-eastern Australia: Drivers, policy effects and implications for the future," Land Use Policy, Elsevier, vol. 102(C).
    8. Sébastien MARCHAND, 2010. "Technical Ef?ciency, Farm Size and Tropical Deforestation in the Brazilian Amazonian Forest," Working Papers 201012, CERDI.

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