Abstract: | This article presents an econometric analysis of land‐cover change in western Honduras. Ground‐truthed satellite image analysis indicates that between 1987 and 1996 net reforestation occurred in the 1,015‐km2 study region. While some reforestation can be attributed to a 1987 ban on logging, the area of reforestation greatly exceeds that of previously clear‐cut areas. Further, new area was also deforested between 1987 and 1996. Thus, the observed land‐cover changes represent a complex mosaic of changing land‐use patterns across time and space. The analysis contributes to the literature on land‐cover change modeling in that: (1) it compares two econometric approaches to capture complex and often bidirectional changes in land cover from 1987 to 1996 as a function of agricultural suitability and transportation costs, and (2) it addresses techniques to identify and correct for spatial autocorrelation in a categorical regression framework. |