Deforestation Impact on the Household Sustainable Local Development: Nicaragua case, 1998-2005.

The paper analyzes the deforestation problem and its Sustainable Local Development (SLD) impact, during 1998-2005 periods. A stochastic frontier production function is defined for panel data of farm-specific variables. The inefficiency effects are assumed to be independently distributed as truncations of normal distributions with constant variance, but with means which are a linear function of observable variables. Panel Data was chosen between social and environment variable of the data base of EMNV’98-05. The results proof that the deforestation problem is explicated by household social expenditure and the poverty. The mean technical efficiency was 25 %, and the poverty reach significant level for explaining technical inefficiency on the stochastic frontier model. The technical efficiency by year was 33 %, 36 % y 5.6 during 1998, 2001 y 2005 respectively. With these considerations, I suggest an educational and specialization process lying on the environment policy for reducing the farmer’s problem effects.