Land inequality and deforestation in the Brazilian Amazon (original) (raw)

The aim of this paper is to demonstrate the relationship between land inequality and deforestation in the Brazilian Amazon. Therefore, it is developed an occupational choice model where an individual decides whether to become a farmer in an already established place or to move in search of economic opportunities and land to clear at the agricultural frontier. This model provides theoretical predictions that are tested empirically. Based on data from 515 municipalities, this paper estimates a Tobit model in order to test the theoretical predictions. Basically, it has been shown that there is little statistical evidence to support the existence of a direct relationship between land inequality and deforestation. Nevertheless, when one takes into account the effects of land inequality on deforestation through its interaction with credit and land reform policies, it can be shown that the pattern of land distribution, indeed, plays a role for deforestation. There is a positive relationship between credit and deforestation in more unequal places. Furthermore, this paper provides evidence that land reform in more unequal municipalities reduces deforestation. Hence, it is clear that there is a role for government to increase social welfare and reduce deforestation rates.

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