Determinants of Amazon Deforestation: The role of Off-Farm Income

Abstract : This paper aims at assessing the determinants of Amazon deforestation, with an emphasis on the role played by off-farm income. We first present a microeconomic model which relates off-farm income to deforestation patterns. We then test the empirical implications by using data on the 2006 Brazilian Agricultural Census. Our results suggest that an increase in off-farm income tends to reduce deforestation. This may be explained by the fact that greater off-farm opportunities tends to increase the opportunity cost of farm labor. Results also show that smallholders are less responsive to the increase in the returns of off-farm activities than large ones, which is in line with our hypothesis of labor market imperfections regarding off-farm activities.
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Submitted on : Wednesday, November 19, 2014 - 4:24:44 PM
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Claudio Araujo, Jean-Louis Combes, José Gustavo Feres. Determinants of Amazon Deforestation: The role of Off-Farm Income. 2014. ⟨halshs-01084611⟩

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