An Econometric Study of Deforestation in the Brazil’s Amazonian Municipalities

Abstract

Using both analytical and econometric frameworks, this paper evaluates the causes of deforestation in the Brazilian Amazonian municipalities from 2000 to 2004. Starting with an analytical framework, the main causes that led farmers to cut down forests and convert the soil use to other activities are highlighted. Basing on the analytical framework, an equation is developed and estimated using a dynamic panel data model. Agricultural prices, rural credit and government expenditure on transport have played important roles as stimulators for deforestation as well as an inertial process of deforestation has taken place. The article ends by suggesting some policies to restrain deforestation without reducing the income of farmers and the accessibility of the local population.
Keywords: Amazonian region, Brazil, Deforestation, Panel data.