Economic models of tropical deforestation: a review

Abstract

As international concern over tropical deforestation has grown over the last ten years, researchers have sought to understand the causes of deforestation and possible solutions using quantitative economic models. This book reviews the results and methodology of over 150 of these models and synthesizes the main lessons that can be learned from them. Higher agricultural prices, lower wages, less off-farm employment, and more roads generally lead to more deforestation. Major doubts remain on the impact of technological change, agricultural input prices, household incomes, and tenure security. The role of macro level factors such as population growth, poverty reduction, national income levels, economic growth and foreign debt is still largely uncertain. While the boom in deforestation modeling has yielded new insights, many model results should be regarded with caution because of poor data quality and methodological weaknesses. In particular, the book finds most multi country regression models to be of limited value. It recommends a shift in future research towards household and regional level studies, instead of the current emphasis on national and multi-country studies.