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The Dynamics of Deforestation and Economic Growth in the Brazilian Amazon

Lykke Andersen, Clive WJ Granger, Eustaquio J Reis, Diana Weinhold, Sven Wunder
Cambridge University Press (12 December 2002)

A multi-disciplinary team of authors analyse the economics of Brazilian deforestation using a large data set of ecological and economic variables. They survey the most up to date work in this field and present their own dynamic and spatial econometric analysis based on the municipality level panel data spanning the entire Brazilian Amazon from 1970 to 1996. 

By observing the dynamics of land use change over such a long period, the team is able to provide quantitative estimates of the long-run economic costs and benefits of both land clearing and government policies such as road building. 

The authors find that some governmental policies, such as road paving in already highly settled areas, are beneficial both for economic development and for the preservation of forest, while other policies, such as the construction of unpaved road through virgin areas, stimulate wasteful land uses to the detriment of both economic growth and forest cover.

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