What Drives Deforestation in the Brazilian Amazon?

While previous empirical analysis of deforestation focused on population, this paper builds from a model of land use which suggests many determinants of deforestation in the Brazilian Amazon. I derive a deforestation equation from this model and test a number of those factors using county-level data for the period 1978–1988. The data include a satellite deforestation measure which allows improved within-country analysis. The major empirical finding is the significance of both land characteristics (such as soil quality and vegetation density) and factors affecting transport costs (such as distance to major markets and both own- and neighboring-county roads). Government development projects also appear to affect clearing, although credit infrastructure does not. However, as such policies themselves may be functions of other factors, estimated effects of policies must be interpreted with some caution. Finally, the population density does not have a significant effect on deforestation when many potential determinants are included. However, a quadratic specification reveals a more robust result: the first migrants to a county have greater impact than later immigrants. This implies that the distribution of population affects its impact.