Land use and land cover change in forest frontiers: The role of household life cycles

Tropical deforestation remains a critical issue given its present rate and a widespread consensus regarding its implications for the global carbon cycle and biodiversity. Nowhere is the problem more pronounced than in the Amazon basin, home to the world's largest intact, tropical forest. This article addresses land cover change processes at household level in the Amazon basin, and to this end adapts a concept of domestic life cycle to the current institutional environment of tropical frontiers. In particular, it poses a risk minimization model that integrates demography with market-based factors such as transportation costs and accessibility. In essence, the article merges the theory of Chayanov with the household economy framework, in which markets exist for inputs (including labor), outputs, and capital. The risk model is specified and estimated, using survey data for 261 small producers along the Transamazon Highway in the eastern sector of the Brazilian Amazon.