The Deforestation Dilemma: Unraveling Causes in the Brazilian Amazon's Legal Zone

Deforestation in the Brazilian Amazon's Legal Zone is a complex issue influenced by various factors. From the region's unique soil and climate to human activities like population movements and urban expansion, the drivers are many. Researchers often point to the actions of public and private economic actors, who have historically shaped land use and economic activities in the Amazon. One key approach to understand these causes is using Granger's causality test. This method involves dynamic models for panel data, as proposed by Holtz-Eakin et al. (1988) and refined by Arellano-Bond (1991), based on Granger's original 1969 work. The study looked at the period from 1997 to 2006 and found interesting results. It revealed that there's a two-way relationship between deforestation and both permanent and temporary crop areas. The size of cattle herds also plays a significant role. This means that as these factors increase, so does deforestation, and vice versa.