It's not just where you farm; It's whether your neighbor does too. How agglomeration economies are shaping new agricultural landscapes

Abstract

This article explores the effect of neighborhood land use on land use change in Mato Grosso, Brazil, one of the world's most dynamic agricultural frontiers. Using an innovative combination of spatial statistics and remotely sensed data, this research shows that the likelihood of an area being converted to agriculture is closely tied to how land is used in a location's surroundings. The results also suggest that this spatial spillover effect cannot be tied exclusively to the distribution of natural suitability characteristics. Rather, the likelihood of an area being converted to agriculture appears to reflect the dynamic socio-economic conditions of a location's surroundings. The findings imply that (i) agricultural agencies or experts seeking to support developing agricultural regions should recognize the importance of returns to scale and local clustering and that (ii) land use modeling can be improved by accounting for suitability and land uses in nearby locations.