Abstract

We investigate how variations in agricultural commodity prices affect deforestation. We use data on deforestation covering all the World at a spatial resolution of 0.5 × 0.5 degree latitude and longitude over the 2001-2018 period. We combine information on soil characteristics and world- wide variations in agricultural commodity prices to identify local exogenous changes in output price. Variations in output prices are positively associated with deforestation worldwide. We find that agricultural commodity price fluctuations are responsible of 55% (±10%) of worldwide deforestation over the period.

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