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

Claudio Araujo (), Jean-Louis Combes () and José Féres

No 201423, Working Papers from CERDI

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.

Keywords: Deforestation; Farm household; Off-farm income; Pseudo-panel (search for similar items in EconPapers)
JEL-codes: C23 Q23 Q12 (search for similar items in EconPapers)
Pages: 19
Date: 2014-10
New Economics Papers: this item is included in nep-agr, nep-env and nep-lam
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Related works:
Journal Article: Determinants of Amazon deforestation: the role of off-farm income (2019) Downloads
Working Paper: Determinants of Amazon deforestation: the role of off-farm income (2018)
Working Paper: Determinants of Amazon Deforestation: The role of Off-Farm Income (2014) Downloads
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