Spatial Econometric Analysis and Project Evaluation: Modeling Land Use Change in the Darién

The Program for the Sustainable Development of Darién Province in Panama is a $70 million operation approved in 1998 and a major component of the program involves the resurfacing of the Pan American highway, which runs roughly north south through the province to a point about 70 kilometers from the Colombian border. The paper illustrates the use of spatial analysis techniques to predict the land use changes that would occur after the road is resurfaced and other project interventions completed. The predictions are based on a spatial econometric model relating categories of land use to geophysical and socioeconomic variables, including transportation costs and distance from markets. The results of this model are used to predict the spatially explicit effects of road resurfacing on economic activities. The methods explored in this paper offer a promising way to combine behavioral models of human activity with geographic information to realistically assess the prospective land use changes induced by development projects.