Fire, Tractors, and Health in the Amazon: A Cost-Benefit Analysis of Fire Policy

Abstract

Pollution from agricultural fires is a global health issue which is particularly challenging where smallholders depend on burnings for subsistence. In Acre state, Western Amazon, a partial ban on fire, enforced with fines, is coupled with subsidized tractors. To evaluate this policy, discrete choice experiment and contingent valuation were merged into a novel statistical variant of the Hicks-Kaldor test that is robust to preference heterogeneity. Among 27 ways to extend the ban, five could improve both respiratory health and smallholders’ welfare, whether compensated with tractors which are available for longer hours and at the right time of the year.