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Assessing the Functioning of Land Rental Markets in Ethiopia

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  • Klaus Deininger
  • Daniel Ayalew Ali
  • Tekie Alemu

Abstract

Although a large theoretical literature discusses the possible inefficiency of sharecropping contracts, empirical evidence on this phenomenon has been ambiguous at best. Household-level fixed-effect estimates from about 8,500 plots operated by households that own and sharecrop land in the Ethiopian highlands provide support for the hypothesis of Marshallian inefficiency. At the same time, a factor adjustment model suggests that the extent to which rental markets allow households to attain their desired operational holding size is limited. Our analysis points toward factor market imperfections (no rental for oxen), lack of alternative employment opportunities, and tenure insecurity as possible reasons underlying such an outcome. They suggest that, rather than worrying only about Marshallian inefficiency, attention to the broader environment and policy framework within which producers can adjust to their optimum operational area will be warranted. (c) 2008 by The University of Chicago. All rights reserved..

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Bibliographic Info

Article provided by University of Chicago Press in its journal Economic Development and Cultural Change.

Volume (Year): 57 (2008)
Issue (Month): 1 (October)
Pages: 67-100

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Handle: RePEc:ucp:ecdecc:v:57:y:2008:i:1:p:67-100

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References

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  1. John Pender & Marcel Fafchamps, 2006. "Land Lease Markets and Agricultural Efficiency in Ethiopia," Journal of African Economies, Centre for the Study of African Economies (CSAE), Centre for the Study of African Economies (CSAE), vol. 15(2), pages 251-284, June.
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  4. Deininger, Klaus & Ali, Daniel Ayalew & Holden, Stein & Zevenbergen, Jaap, 2007. "Rural land certification in Ethiopia : process, initial impact, and implications for other African countries," Policy Research Working Paper Series 4218, The World Bank.
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Citations

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Cited by:
  1. Jin, Songqing & Deininger, Klaus W., 2007. "Land Rental Markets in the Process of Rural Structural Transformation: Productivity and Equity Impacts from China," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) 9932, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  2. Dokken, Therere, 2013. "Land tenure in Tigray: How large is the gender bias?," CLTS Working Papers, Centre for Land Tenure Studies, Norwegian University of Life Sciences 5/13, Centre for Land Tenure Studies, Norwegian University of Life Sciences.
  3. Headey, Derek D. & Dereje, Mekdim & Ricker-Gilbert, Jacob & Josephson, Anna & Taffesse, Alemayehu Seyoum, 2013. "Land constraints and agricultural intensification in Ethiopia: A village-level analysis of high-potential areas:," ESSP working papers, International Food Policy Research Institute (IFPRI) 58, International Food Policy Research Institute (IFPRI).
  4. Ayalew Ali, Daniel & Deininger, Klaus, 2012. "Causes and implications of credit rationing in rural Ethiopia : the importance of spatial variation," Policy Research Working Paper Series 6096, The World Bank.
  5. Deininger, Klaus & Ali, Daniel Ayalew & Alemu, Tekie, 2009. "Impacts of Land Certification on Tenure Security, Investment, and Land Markets: Evidence from Ethiopia," Discussion Papers, Resources For the Future dp-09-11-efd, Resources For the Future.
  6. Deininger, Klaus & Jin, Songqing, 2007. "Land rental markets in the process of rural structural transformation : productivity and equity impacts in China," Policy Research Working Paper Series 4454, The World Bank.
  7. Place, Frank, 2009. "Land Tenure and Agricultural Productivity in Africa: A Comparative Analysis of the Economics Literature and Recent Policy Strategies and Reforms," World Development, Elsevier, Elsevier, vol. 37(8), pages 1326-1336, August.
  8. Deininger, Klaus & Ali, Daniel Ayalew & Alemu, Tekie, 2011. "Productivity effects of land rental markets in Ethiopia : Evidence from a matched tenant-landlord sample," Policy Research Working Paper Series 5727, The World Bank.

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