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- Finally, we sum these predictions by cell over the period and compute for each cell the contribution of prices as the difference between the benchmark and the counterfactual prediction, divided by the counterfactual. The Figure shows the difference in p.p. between Figure (4.a) and the sample quantification based on a specification where interaction terms between prices and cell characteristics are included (dist. port, dist cap. and light lights in 2000). OA2.3 Full quantification with cell-level characteristics Figure OA.7 provides the same quantification as in Figure 4, but over all the Tropics.
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- ln Price ln Price*Cover[D1] ln Price*Cover[D2] ln Price*Cover[D3] ln Price*Cover[D4] ln Price*Cover[D5] ln Price*Cover[D6] ln Price*Cover[D7] ln Price*Cover[D8] ln Price*Cover[D9] ln Price*Cover[D10] -1 0 1 2 3 Point estimate and 99% CI Note: Point estimates and confidence intervals for the effect of the crop price index on deforestation. The crop price index includes meat prices, and the relative suitability of alfalfa, pasture and grass used as measure of meat suitability. Model 1 is the baseline estimate of the effect while Model 2 allows the effect to vary across deciles of forest cover as of 2000. Horizontal lines represent 99% confidence intervals.
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- OA1.5 International prices: descriptive statistics Figure OA.4: Average price index variation, 2001-2018 (a) Americas (b) Africa (c) Asia and Oceania Note: Average value of the crop price index over the 2001-2018 period, taking 2001 as a base year.
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- OA2 Statistical analysis OA2.1 Baseline estimates This sub-section contains the two Tables related to the Figures displaying the baseline estimates in the manuscript. Table OA.4 displays the estimates used to construct Figure 1, Model 1 (Column 1) and Model 2 (Column 2). Table OA.5 shows the estimates used in Figure 3. Column (1) provides the estimates of Model 1, that is of specification (3) when we include interaction variables between the price index and cell characteristics (distance to the closest port, distance to the capital city and the intensity of nighttime lights in 2000). In column (2), we provide the estimates of the same specification, but with the price index interacted with a binary variable for each decile of the initial forest cover distribution. Finally, in column (3) we control for a full set of interactions between country dummies and the price index.
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- OA2.2 Focus on the Congo Basin (grey scale) Figure OA.6: Focus on the Congo Basin: (b) Additional contribution of cell-level characteristics (grey scale) Note: Quantification is based on the estimation results of Model 2 (see Section 3). We first compute the predicted level of deforestation using observed prices (the benchmark). We then compute a counterfactual level of deforestation assuming fixed prices at their 2001 level.
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- OA2.6.8 Relative deforestation: percent of 2000 forest cover Figure OA.13: Relative deforestation: percent of 2000 forest cover Model 1 Model 2
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- OA2.7 Global and local prices: correlations Figure OA.16: Local and word prices (a) Maize (b) Rice 1.00 1.50 2.00 2.50 3.00 Price -base 100, 2002 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Year World price Local price 1.00 1.50 2.00 2.50 3.00 3.50 Price -base 100, 2002 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Year World price Local price (c) Sorghum (d) Wheat 0.50 1.00 1.50 2.00 2.50 Price -base 100, 2002 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Year World price Local price 1.00 1.50 2.00 2.50 Price -base 100, 2002 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Year World price Local price Source: Porteous (2019) and World Bank.
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- SD) 1 2 3 4 5 6 7 8 9 10 Deciles + 1 SD /- 1SD Average 99th percentile Source: The figure represents the number of deforested pixels over the total number of pixels in the cell at the beginning of the period, by groups of cells defined based on deciles of initial forest cover. Authors’ computation from Hansen et al. (2013), using a canopy threshold of 25%. Table OA.1: Suitability within-country variance Crop Within Country Crop Within Country Crop Within Country share share share Banana 0.61 Cotton 0.58 Sugar 0.69 Barley 0.64 Maize 0.62 Soybean 0.57 Cocoa 0.64 Oil Palm 0.66 Tea 0.70 Coconut 0.74 Rice 0.71 Tobacco 0.50 Coffee 0.64 Sorghum 0.51 Wheat 0.63 Source: Authors’ computation from GAEZ data. Share of variance of average cell suitability within country in total variance.
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- Standard errors clustered at the cell level in parentheses. The dependent variable is the hyperbolic inverse sine of the number of pixels deforested in the cell. ln Price is the log of our crop price index, defined in equation (2). Cover[x] are bins for deciles of forest cover in 2000. Average temperature and Average precipitation are the yearly average temperature and precipitation of the cell, respectively. Figure OA.12: Controlling for average suitability Model 1 Model 2 ln Price (baseline) ln Price (control. for av. suit.) 0 .5 1 1.5 2 Point estimate and 99% CI Note: Point estimates and confidence intervals for the effect of the crop price index on deforestation. Model 1 is the baseline estimate of the effect while Model 2 controls for average cell suitability interacted with year dummies. Horizontal lines represent 99% confidence intervals.
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- Table OA.21: Correlation local prices and world prices (1) (2) (3) (4) (5) Dep. var. Local price World price 0.659a 0.610a 0.694a 0.689a 0.960a (0.023) (0.032) (0.026) (0.036) (0.074) Sample (crops included) All Maize Rice Sorghum Wheat Market FE Yes Yes Yes Yes Yes Crop FE Yes No No No No Observations 3292 1403 868 873 145 Note: Least square estimator. c significant at 10%; b significant at 5%; a significant at 1%. Data on local prices are from Porteous (2019). Local price is the log of the local market price. World price is the log of the international price.
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- Table OA.4: Baseline results (1) (2) Model Model 1 Model 2 ln Price 1.267a (0.088) × Cover[D1] -0.136 (0.113) × Cover[D2] 0.566a (0.104) × Cover[D3] 0.866a (0.102) × Cover[D4] 0.877a (0.101) × Cover[D5] 1.115a (0.097) × Cover[D6] 1.177a (0.097) × Cover[D7] 1.409a (0.098) × Cover[D8] 1.594a (0.094) × Cover[D9] 1.837a (0.092) × Cover[D10] 2.153a (0.095) Cell FE Yes Yes Country × Year FE Yes Yes Observations 221184 221184 Period 2001-2018 2001-2018 R2 0.860 0.861 Note: Least square estimator. c significant at 10%; b significant at 5%; a significant at 1%. Standard errors clustered at the cell level in parentheses. The dependent variable is the hyperbolic inverse sine of the number of pixels deforested in the cell. ln Price is our crop price index, defined in equation (2). Cover[x] are bins for deciles of forest cover in 2000.
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