Abstract
Malaria is a serious problem limiting agricultural colonization in the neotropics, especially in the Brazilian Amazon. We analyze a model that links the disease with deforestation and ecological measures to control the mosquito. In the model the probability of contracting malaria increases with population density, which is a principal endogenous variable in land-use decisions. A higher incidence of malaria reduces labor productivity. Farmers maximize profit by allocating labor between cultivation and health activities that reduce the incidence and severity of malaria. Commodity price changes, transportation improvements, and land clearance costs all affect the prevalence of malaria, and health and labor productivity. A reduction in land clearance costs will improve health and labor productivity but will exacerbate deforestation. An increase in the commodity price and a reduction in transportation costs exacerbate deforestation but reduce the prevalence of malaria, although the resultant change in the equilibrium levels of health and labor productivity is ambiguous.
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