Fever From the Lost Forest: Impacts and Management of Health Externalities From Land Use Change in Brazil

31 Pages Posted: 8 Jul 2020

See all articles by Katherine Lee

Katherine Lee

University of Idaho - Department of Agricultural Economics and Rural Sociology

David Finnoff

University of Wyoming

Peter Daszak

EcoHealth Alliance

Date Written: December 15, 2019

Abstract

Land use change alters the movement of people, pathogens, and vectors, creating novel pathways for disease emergence. A growing body of empirical evidence finds that land use change affects the incidence of vector-borne disease. When management decisions and policy do not consider this relationship, there is potential social welfare loss through health externalities. Herein we develop a dynamic model of optimal land use where both the state and control variable contribute to a negative externality- disease incidence. We compare the net social benefits and path of land conversion under an optimal management regime with scenarios in which the externalities are ignored. Using a two-tiered payment mechanism we demonstrate how the externalities can be internalized by adjusting the payments along the dynamic path of land use. The model is calibrated using malaria incidence and economic data from the Legal Amazon of Brazil. We find that ignoring the health costs of land use change reduces social net benefits of land management and impacts optimal land conversion trajectories. We then simulate the dynamic path of socially optimal management and examine the sensitivity of our predictions by modifying the model assumptions.

Keywords: Environmental externality; land use change; malaria; ecosystem services; vector-borne disease

JEL Classification: Q24; Q56; Q57; Q20; Q15

Suggested Citation

Lee, Katherine and Finnoff, David and Daszak, Peter, Fever From the Lost Forest: Impacts and Management of Health Externalities From Land Use Change in Brazil (December 15, 2019). Available at SSRN: https://ssrn.com/abstract=3605540 or http://dx.doi.org/10.2139/ssrn.3605540

Katherine Lee (Contact Author)

University of Idaho - Department of Agricultural Economics and Rural Sociology ( email )

Box 442334
Moscow, ID 83844-2334
United States

David Finnoff

University of Wyoming ( email )

1000 E University Ave
Laramie, WY 82071
United States

Peter Daszak

EcoHealth Alliance ( email )

460 W 34th St.
Fl 17
New York, NY New York 10001
United States

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