Institutional Affiliation: FGV EPGE Brazilian School of Economics and Finance
|Wilderness Conservation and the Reach of the State: Evidence from National Borders in the Amazon|
with Robin Burgess, Benjamin A. Olken: w24861
Preserving wilderness ecosystems in developing countries is challenging because their remote location places them far from state control. We investigate this using 30x30 meter satellite data to determine how Amazonian deforestation changes discretely at the Brazilian international border. In 2000, Brazilian pixels were 30 percent more likely to be deforested, and between 2001 and 2005 annual Brazilian deforestation was more than 3 times the rate observed across the border. In 2006, just after Brazil introduces policies to reduce illegal deforestation, these differences disappear. These results demonstrate the power of the state to affect whether wilderness ecosystems are conserved or exploited.
|Hysteresis and the Welfare Effect of Corrective Policies: Theory and Evidence from an Energy-Saving Program|
with François Gerard: w24608
A growing body of evidence documents that policies can affect household behaviors persistently, even if they are no longer in place. This paper studies the importance of such "hysteresis" – the failure of an effect to reverse itself as its underlying cause is reversed – for the welfare evaluation of corrective policies. First, we introduce hysteresis into the textbook framework used to derive canonical sufficient statistics formulas for the welfare effect of corrective policies. We then derive new formulas allowing for hysteresis. We show that, under certain conditions, the persistent effect of a short-run (i.e., temporary) policy becomes a new key statistic for evaluating the welfare effect of such a policy, and also of a long-run (i.e., permanent) version of a similar policy. Second, we ...