Does Credit A!ect Deforestation? Evidence from a Rural Credit Policy in the Brazilian Amazon

Abstract

The concession of rural credit in the Brazilian Amazon became conditional upon stricter legal and environmental requirements in 2008. This paper uses this policy change to investigate credit constraints in the region, and how the variation in credit impacts deforestation. Di!erences-indi!erences estimation based on a panel of municipalities shows that the policy change led to a reduction in rural credit, particularly for cattle ranching. The e!ect is concentrated on medium and large loans. A two-stage estimation shows that the decrease in rural credit has curbed deforestation, especially in municipalities where cattle ranching is the main economic activity.

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Cite this paper

@inproceedings{Assuno2013DoesCA, title={Does Credit A!ect Deforestation? Evidence from a Rural Credit Policy in the Brazilian Amazon}, author={Juliano Junqueira Assunç{\~a}o and Clarissa C. e Gandour and Romero Barreto Rocha and Rudi Rocha}, year={2013} }