Abstract: This paper is one of the first to theoretically and empirically analyze the effect of property rights establishment on exports. Using a dynamic model of land allocation, I show that property rights unambiguously leads to more forest land and fewer wood exports in the long run, though deforestation can increase during the transition. Indeed, I find empirically that wood exporting from the Amazon intensifies for two years following registrations through the Brazilian government’s Amazon region land-titling program Terra Legal, peaking in the third quarter post-rollout, before declining. Evidence further suggests that medium-sized farms, which obtain the rights cheaply, clear forest land for livestock production. To estimate the effect precisely, I use confidential, municipal-level export data, which captures the extent of deforestation, and control for municipal-product and quarter-year trends, relying on the scheme’s phased rollout for identification.

JEL Classification: R11, F18, O13.

Keywords: property rights, trade, deforestation, land conversion

The public research seminars of the Department of Economics and Finance (DEF) at Tallinn University of Technology  usually take place on the second and fourth Wednesdays of the month in both onsite and online format, unless announced otherwise. The presentation will last approximately 45 minutes followed by 15 minutes of discussion. The seminars are held in English. Copies of the paper are usually made available at the seminar. The DEF seminar series is organised in collaboration with the project ”Individual Behaviour and Economic  Performance: Methodological  Challenges and Institutional Context” (IBEP), which has received funding from the European Union’s Horizon 2020 Research and Innovation programme under Grant Agreement No 952574. Questions about the seminar can be sent to the IBEP seminar coordinator Rachatar Nilavongse, rachatar.nilavongse@taltech.ee.