What Drives Deforestation in the Brazilian Amazon? Evidence from Satellite and Socioeconomic Data

This paper analyzes the determinants of deforestation in the Brazilian Amazon. From a model of optimal land use, it derives and then estimates a deforestation equation on county-level data for the period 1978 to 1988. The data include a deforestation measure from satellite images which is a great advance in allowing within-country analysis. Evidence exists that: most important for policy, both increased road density in neighbouring counties lead to more deforestation; government development projects increase deforestation; greater distance from the economic center of the country leads to less deforestation; and better soil quality leads to more deforestation. The evidence on provision of subsidized credit is mixed. Addressing an oft-mentioned factor, the population density is significant when population is the sole explanatory variable, but not when other variables suggested by the model are included. A quadratic population specification yields a more robust (although still small), concave effect, suggesting the importance of the spatial distribution of population