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Determinants of Amazon deforestation: the role of off-farm income

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

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Abstract: This paper aims at assessing the determinants of Amazon deforestation, emphasizing the role played by off-farm income. Initially an economic model is provided which relates off-farm income to deforestation patterns. Subsequently, empirical implications are tested using data from the 2006 Brazilian Agricultural Census. Estimation results suggest that higher off-farm incomes are associated with reduced deforestation rates. In fact, higher off-farm incomes might increase the opportunity cost associated with agricultural activities. The latter option becomes less attractive and farmers dedicate less time to farm activities, thereby reducing deforestation pressure. Results also show that smallholders respond less to the increase in the returns from off-farm activities when compared to largeholders, which matches our hypothesis of labor market imperfections regarding off-farm activities.

Keywords: Deforestation in Amazonia; Economic models (search for similar items in EconPapers)
Date: 2018-09-06
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01875172
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Published in Environment and Development Economics, Cambridge University Press (CUP), 2018, pp.1 - 19. ⟨10.1017/S1355770X18000359⟩

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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 (2014) Downloads
Working Paper: Determinants of Amazon Deforestation: The role of Off-Farm Income (2014) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01875172

DOI: 10.1017/S1355770X18000359

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