College of Agriculture & Natural Resources
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Item SPATIAL EFFECTS OF LOCAL GOVERNANCE INSTITUTIONS ON ILLEGAL DEFORESTATION IN DEVELOPING COUNTRIES(2019) Kraus Elsin, Yoanna; Lichtenberg, Erik; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Deforestation worldwide is a major concern. In developing countries, it is a merciless and devastating reality. My thesis addresses how local governance institutions' strength influences this phenomenon, focusing on the Colombian Andes. The theoretical analysis examines spatial patterns of illegal deforestation when enforcement is costly, and costs rise with distance from governmental centers. Those spatial patterns depend on the interaction between transportation costs incurred by farmers growing crops on deforested land and enforcement costs incurred by government officials conducting on-the-ground monitoring of deforestation. Areas closer to governmental centers can be monitored effectively and are thus less subject to illegal deforestation. Illegal deforestation is, therefore, more likely in areas where monitoring costs are high, but farmers' transportation costs are not. The calibration exercise then shows, that in this context, patches of deforestation might arise within the forest, causing unwanted forest fragmentation. Based on these results I study empirically, first, if the effect of access difficulty on deforestation may be non-monotonic in accessibility, causing forest fragmentation; and second, if this fragmentation is more likely to occur when enforcement is more costly. I approach this question in two manners: (1) using a cubic function of access difficulty interacted with measures of enforcement capacity and (2) non-parametrically using indicators for discrete ranges of access difficulty, again interacted with measures of enforcement capacity. I construct for this purpose a panel data set for the Colombian Andes from a variety of sources. Data on deforestation comes from satellite imaging at a 30mx30m resolution in two periods (2000-2005) and (2005-2010), this data was matched with biophysical variables such as, altitude, slope, precipitation, soil type, and roads using geographical information systems (GIS), as well as with socioeconomic variables which vary by municipality and time. The regressions show a significant non-monotonic effect of access difficulty on deforestation. The evidence shows that deforestation probability first decreases with access difficulty, and it then increases in remoter places. This evidences forest fragmentation as one moves away from roads. Moreover, this pattern is affected by the fiscal performance index (a proxy for enforcement capacity) of the municipalities, showing that municipalities with lower enforcement capacity have a higher probability to present illegal deforestation at remote places. This research adds to the deforestation literature, by studying the spatial reach of governance capacity and how it affects deforestation patterns. The findings highlight the importance of taking enforcement and monitoring costs as well as their spatial variation into account when designing land-use policies and defining the institutional arrangements, funding and monitoring processes to implement them.Item The Economics of Fallow: Evidence from the Eastern Amazon(2007-08-01) Klemick, Heather; Lopez, Ramon; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)With tropical deforestation a major contributor to greenhouse gas emissions and biodiversity loss, the land use decisions of small-scale farmers at the forest margins have important implications for the global environment. In some tropical forests, such as the Eastern Brazilian Amazon, farmers practice a shifting cultivation system that maintains large amounts of land under forest fallow. I examine whether local benefits of fallowing such as soil restoration, erosion mitigation and hydrological regulation are of sufficient value to farmers to stem the expansion of permanent cropland at the expense of forest. I quantify the value of ecosystem services provided by fallow to agriculture and test whether local forest externalities are economically significant, using farm survey and GIS data from the Eastern Amazon. I estimate a production function to determine the contribution of on-farm and upstream fallow to income, using an instrumental variables approach to address endogeneity. I find that on-farm and upstream fallow are both associated with higher farm income. This result both confirms the agronomic evidence that fallow boosts yields and suggests that fallow provides positive hydrological externalities to downstream farms. I also examine whether farmers respond strategically to their neighbors' land use, taking advantage of ecosystem services provided by upstream farms. I use a spatial econometric model to estimate the effect of upstream farms' fallow on downstream land allocation. I find no evidence that farmers alter their fallowing based on land use upstream. I then investigate whether market failures encourage fallowing. If farmers cannot purchase inputs used in cultivation due to liquidity constraints, they may keep more land under fallow than optimal. I use the estimated production function parameters to determine whether each farm's allocation of land between cropping and fallow is efficient from an individual perspective. I then estimate the effect liquidity indicators on land use efficiency. I find that over-fallowing is negatively associated with commercial credit use and off-farm income, suggesting that liquidity constraints do hinder agricultural intensification. Because I find evidence to support the existence of positive externalities to fallow, the loosening of liquidity constraints that encourage fallowing has ambiguous implications for community-level welfare.