Agricultural productivity and the fight against deforestation : an empirical analysis of the eﬀect of factor-biased technical change on agricultural land use and forests in Brazil
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- Master Thesis 
The aim of this thesis is to study the eﬀect of two new agricultural technologies on agricultural land use and forests. To guide our empirical work, we present a simple model in which the eﬀect on land use in agriculture depends on the factor-bias of technical change. To test the predictions of the model, we utilize an instrumental variables approach to study the introduction of genetically engineered soy and a second harvesting season of maize in Brazil. In order to identify the eﬀect of these technologies, we exploit the exogenous timing of their adoption, in addition to their heterogeneous impacts on agricultural productivity across geographical areas. Ourmainﬁndingisthattechnicalchangeinagriculturehasambiguouseﬀectsonforestloss. First, land-augmenting technical change, in the form of second season maize, increases the land productivity which reduces pressure on forests. Second, labor-augmenting technical change, in the form of genetically engineered soy, increases labor productivity, rising the pressure on forest. However, our results suggest that a second harvesting season of maize primarily is exploited as a method to consolidate soy and maize cultivation. Thus, we ﬁnd the eﬀect of land augmenting technical change to be indirect, as a result of increased double cropping of soy and maize leading to a reduction in ﬁrst season maize cultivation. We also ﬁnd indications of genetically engineered soy replacing cultivation of ﬁrst season maize.