Julien Wolfersberger, Paris-Saclay University, AgroParisTech-INRAE Economie Publique, CEC associate researcher.
Roads Investment, Development and Deforestation
We build a quantitative spatial model to study the impact of investments in transportation infrastructure on forest losses in the Brazilian Amazon. We examine how new roads (or the modernization of existing ones) change the spatial equilibrium of agriculture, modify trade opportunities and cause deforestation. We quantify the model using a novel data-set combining agricultural census data and satellite-data on both forest cover and road networks. We find that a decrease in transport costs by 10% between the states of the so-called “arc of deforestation” and the closest international port increases deforestation by approximately 4% in this region. We highlight the general equilibrium effects related to this result and examine several important outcomes related to structural transformation.
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