Research

Working Papers

Human Capital and Technology Adoption: Evidence from Brazil’s Green Revolution (w/ Juliano Assunção and Claudio Ferraz), Under review.

This paper studies the relationship between human capital and technology adoption in agriculture. We explore the innovations that adapted soy to the agro-climatic conditions of Central Brazil in the 1970s (Green Revolution) to provide evidence on the relationship between technology, human capital demand, spatial sorting, and agricultural productivity. Exploring agro-climatic differences in suitability to use modern technologies across municipalities, we provide evidence that the Green Revolution increased the demand for human capital in agriculture. We find it induced the entry of workers with higher educational attainment and born in states intensive in mechanized crop cultivation and the exit of workers with lower educational attainment born in states intensive in cattle ranching. The Green Revolution’s direct effects on land productivity and its indirect effects operating through the labor force’s skill composition increased agricultural productivity significantly. Using a quantitative model, we find that changes in skill composition explain more than one-third of the Green Revolution’s effects on productivity.

Environmental Effects of Improvements in Transportation Infrastructure in Brazil’s Amazon (w/ Juliano Assunção and Rafael Araújo), February 2022.

Improvements in transportation infrastructure are fundamental to promote development, but computing their environmental costs is challenging. This paper develops a framework to estimate the impacts of investments in transportation infrastructure on deforestation and agricultural production in the Brazilian Amazon. Using novel data on the evolution of the transportation network in Brazil, we construct a measure of market access that captures the aggregate effects of changes in trade costs on deforestation. Our results indicate that an increase in 1% in market access increases deforestation in the following decade by roughly 0.50%. Using our framework to evaluate the impacts of a large project in the Brazilian Amazon, the Ferrogrão railroad, we find that market access approach considerably changes the predicted area of influence and ecological footprint.

Cutting Special Interests by the Root: Evidence from the Brazilian Amazon (w/ Ricardo Dahis), July 2021. Revise and Resubmit at Journal of Public Economics.

Government policies may impact economic outcomes directly but also indirectly through effects on political equilibria. This paper examines the effects of the PPCDAm — a centralized environmental policy that synced real-time satellite deforestation data with enforcement on the ground — on the behavior and electoral outcomes of a powerful special-interest group operating in the Brazilian Amazon: farmers. Exploiting close elections, we document that municipalities governed by farmer mayors had higher deforestation rates and CO2e emissions, earmarked more resources to agriculture, and experienced more land-related conflict before, but not after, the PPCDAm was implemented. Any electoral advantage these mayors had before the policy also disappears with the introduction of the PPCDAm. Our findings are consistent with a political agency model where candidates use their occupation to signal commitment to deforestation. 

Technological Change and Deforestation: Evidence from Brazil’s Green Revolution (w/ Juliano Assunção), March 2015.

This paper studies the impact of technological change in agriculture on land use in Central Brazil from 1960 to 1985. It explores technological innovations that adapted soybeans to the region to estimate the effect of these innovations on land use. Following the technological innovations, municipalities more suitable for soybean cultivation experienced increases in cropland and decreases in native pastures. The rise in cropland was smaller than the decline in native pastures and, as a consequence, deforestation increased less in municipalities more suitable for soybean cultivation. Increases in fertilizer adoption and tractor use accompanied the changes in land use, suggesting that technological innovations induced substitution from investments in forest clearing for investments in agricultural intensification. These results are consistent with a model in which farmers are capital constrained and in which crop cultivation is more capital-intensive than cattle grazing.

Publications

Extension Services Can Promote Pasture Restoration: Evidence from Brazil’s Low Carbon Agriculture Plan (w/ Pete Newton, Avery Cohn, Juliano Assunção, Cristiane Camboim, Diego de Faveri, Barbara Farinelli, Viviana Perego, Mateus Tavares, Janei Resende, Sidney de Medeiros, Timothy Searchinger), Prooceedings of the National Academy of Sciences, 2022, vol. 111(12).

Innovation and improved practices in the livestock sector represent key opportunities to meet global climate goals. This paper provides evidence that extension services can promote pasture restoration in cattle ranching in Brazil. It uses a Randomized Controlled Trial (RCT) implemented in the context of the ABC Cerrado – a large-scale program launched in 2014 aimed at fostering technology adoption through a combination of training and technical assistance – to examine the effects of different types of extension on agricultural practices, input use, and productivity. Providing technical assistance to previously trained producers promoted pasture restoration, induced farmers to use inputs more intensively, helped them to improve their management and soil conservation practices, and substantially increased revenues. A cost-benefit calculation indicates US$ 1 invested in the ABC Cerrado program increased profits by US$ 1.08-1.45. Incorporating carbon savings amplifies this return considerably.

Geographic Heterogeneity and Technology Adoption: Evidence from Brazil (w/ Juliano Assunção and Pedro Hemsley). Land Economics, 2019, Vol. 95(4), pp. 599-616. [Working Paper]

This paper studies the relationship between geographic heterogeneity and technology adoption in the context of the direct planting system (DPS) in Brazil. The DPS is a no-till farming technique that increases productivity and decreases soil degradation. However, it requires adaptation to local conditions to be profitably used. Combining detailed geographic and agricultural data, we show that geographic heterogeneity reduces DPS adoption. This effect is robust to the inclusion of controls and not observed for technologies that do not require local adaptation. These findings are consistent with models in which geographic heterogeneity increases the cost of adapting technologies to local conditions. 

The Effects of Crop-to-Beef Relative Prices on Deforestation: Evidence from the Tapajós BasinEnvironment and Development Economics, 2018, Vol. 23(4), pp. 391-412.

This paper examines the impact of changes in agricultural land use on deforestation at the local level in the Tapajós Basin in the Brazilian Amazon. It uses exogenous variation in crop-to-beef relative prices to investigate the effects of pasture-to-cropland conversion on deforestation. The findings indicate that increases in crop-to-beef relative prices increase the rate of pasture-to-cropland conversion and reduce the rate of deforestation. The magnitude of the effects implies that land conversion reduced deforestation at the local level by 5,300 square kilometers from 2002 to 2012. This reduction is the equivalent of almost 15 per cent of the total deforestation observed in the region during this period. These results are consistent with a land use model in which cattle ranching and crop cultivation have different input-intensities and there is imperfect mobility of productive factors between municipalities. This model highlights the fact that changes in relative prices affect deforestation through its effect on input prices.

The Economic Consequences of the Agricultural Expansion in Matopiba. Revista Brasileira de Economia, 2018, Vol. 72(2), pp. 161-185.

This paper examines the consequences of the agricultural expansion in the Matopiba – areas from the states of Maranhão, Tocantins, Piauí and Bahia located in the Cerrado biome. Comparing municipalities from these four states located inside and outside the Cerrado biome, it finds that agricultural production evolved similarly in these groups of municipalities until the late 1990s when it started to increase faster in municipalities inside the Cerrado. The growth in agricultural production led to increases in GDP per capita and access to durable goods and basic infrastructure.

Work in Progress

Foreign Demand Shocks and the Spatial Spread of Brazilian Deforestation (w/ Rodrigo Adão and  Jonathan Dingel)

Does Decentralization Increase Tax Revenues? Evidence from Land Taxation in Brazil (w/ Diogo Britto, Alexandre Fonseca, Breno Sampaio, André Sant’anna, and Dimitri Szerman)

Dormant Papers

Political Dynasties and the Quality of Government (w/ Claudio Ferraz and Juan Rios), August 2015.