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ISRN Economics
Volume 2013 (2013), Article ID 828169, 14 pages
Research Article

Impacts of the Recent Expansion of the Sugarcane Sector on Municipal per Capita Income in São Paulo State

Department of Economics, Management and Sociology, University of São Paulo, Avenida Pádua Dias 11, 13418-900 Piracicaba, SP, Brazil

Received 6 June 2013; Accepted 3 July 2013

Academic Editors: D. Dave, W. R. Reed, and M. Tsionas

Copyright © 2013 Luiz Satolo and Mirian Bacchi. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.


The aim of this study is to evaluate the impacts of this expansion on the income of people in the state’s districts and towns. Beginning with a breakdown of the main determinants of per capita income, a spatial dynamic panel model is proposed. The proportion of adults in the municipal population, the labour force utilization rate, and the average labour income were used as control variables. Furthermore, to isolate the impacts of the expansion of the sugarcane sector on per capita gross domestic product (GDP), the share of farming in municipal areas, the share of agriculture within farming in general, the share of sugarcane farming within agriculture, and a dummy for districts and towns with an operational plant were included in the model. The series cover the 645 districts and towns of São Paulo State from 2000 to 2008. The results of the system generalized method of moments (system-GMM) showed a positive relationship of spatial and temporal dependence in the real per capita GDP. And the estimated direct and indirect effects indicate that the expansion of the sugarcane sector had a positive impact on per capita GDP, both in towns where the expansion took place and in their neighbouring towns.