The Brazilian Amazon and Cerrado biomes have been subject to strong pressure from agricultural expansion over the past two decades. A common claim is that the associated tree cover loss was partly driven by speculative land acquisition.
Using a fixed-effect panel, we then assess whether, where, and to what extent changes in conservation policy affect forestland prices over time. Our results confirm that forestland prices contain expectations about converting forestland to agricultural or pasture land. We also find indications that the Brazilian land market conveys information about potential conservation policy leakage and explore this conjecture descriptively using dynamic deforestation hotspot maps.
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