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Land Use and Transportation Costs in the Brazilian Amazon

Author

Listed:
  • Eustaquio Reis

    (IPEA)

  • Diana Weinhold

    (London School of Economics)

Abstract

Transport infrastructure improvements are considered to be one of the most effective tools for stimulating economic activity; at the same time environmentalists have largely condemned most road building as being one of the greatest threats to tropical forests. In this paper we put forth some empirical evidence from the Brazilian Amazon that the relationship between roads and land clearing may be much more complex. In particular, we find that decreasing transport costs in areas that have established settlements is associated with lower rates of land clearing. Constructing roads into relatively pristine areas, however, has the expected effect of increasing agricultural land use and the rate of deforestation. Furthermore, our out of sample model evaluation exercises suggested that changes in land clearing tend to precede, rather than follow, changes in transport costs. Taken together our results suggest that intensifying road networks in settled areas of the Amazon region(as opposed to road building in virgin forest) may be a “win-win” strategy, both enhancing economic development and reducing environmental destruction.

Suggested Citation

  • Eustaquio Reis & Diana Weinhold, 2004. "Land Use and Transportation Costs in the Brazilian Amazon," Urban/Regional 0410003, EconWPA.
  • Handle: RePEc:wpa:wuwpur:0410003
    Note: Type of Document - pdf; pages: 32
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    Cited by:

    1. González-Val, Rafael & Pueyo, Fernando, 2012. "Trade liberalisation and global-scale forest transition," MPRA Paper 36271, University Library of Munich, Germany.
    2. Danilo Camargo Igliori, 2005. "Determinants Of Technical Efficiency In Agriculture And Cattle Ranching: A Spatial Analysis For The Brazilian Amazon," Anais do XXXIII Encontro Nacional de Economia [Proceedings of the 33rd Brazilian Economics Meeting] 137, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].

    More about this item

    Keywords

    transport costs; roads; deforestation; Amazon;

    JEL classification:

    • R - Urban, Rural, Regional, Real Estate, and Transportation Economics

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