Does land tenure security reduce deforestation? Evidence for the Brazilian Amazon

We evaluate the extent to which farms with secure land rights are less prone to deforest and more likely to comply with the Forest Code in the Brazilian Amazon. We use a unique dataset with farm-level information for the whole population of farms in the state of Acre, Brazil. We work with a proxy for land tenure security defined as the absence of overlapping property rights, which means that for each rural plot, there is only one land title attesting to whom the legal ownership belongs. We evaluate the impacts of secure land right on the farm's share of the deforested area and the likelihood that farmers comply with the Brazilian Forest Code, which defines a limit of 20% of the deforested area in each farm. The non-randomness between the treatment (land security) and control (land insecurity) groups is controlled using the inverse probability weighting regression adjustment. Our results highlight that land tenure security reduces the deforested area and increases compliance with the Forest Code.