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Land lease markets and agricultural efficiency: theory and evidence from Ethiopia

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Pender, John L.
Fafchamps, Marcel

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Abstract

This paper develops a theoretical model of land leasing that includes transaction costs of enforcing labor effort, risk pooling motives and non-tradable productive inputs. We test the implications of this model compared to those of the “Marshallian” (unenforceable labor effort) and “New School” (costlessly enforceable effort) perspectives using data collected from four villages in Ethiopia. We find that land lease markets operate relatively efficiently in the villages studied, supporting the New School perspective relative to the other two models. Land contract choice is found to depend upon the social relationships between landlords and tenants, but differences in contracts are not associated with significant differences in input use or output value per hectare. We find that other household and village characteristics do affect input use and output value, suggesting imperfections in other factor markets. These results imply that interventions to improve the functioning of land lease markets are likely to be of little benefit for agricultural efficiency in the villages studied, whereas improvements in other factor markets may be more beneficial.

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Paper provided by International Food Policy Research Institute (IFPRI) in its series EPTD discussion papers with number 81.

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Date of creation: 2001
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Handle: RePEc:fpr:eptddp:81

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Keywords: Land use Ethiopia.; Agriculture Economic aspects Egypt.;

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  28. Pender, John L. & Fafchamps, Marcel, 2001. "Land lease markets and agricultural efficiency: theory and evidence from Ethiopia," EPTD discussion papers 81, International Food Policy Research Institute (IFPRI). [Downloadable!]
    Other versions:
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Zhang, Xiaobo & Fan, Shenggen, 2001. "How productive is infrastructure?: new approach and evidence from rural India," EPTD discussion papers 84, International Food Policy Research Institute (IFPRI). [Downloadable!]
  2. Pender, John & Fafchamps, Marcel, 2002. "Land Lease Markets And Agricultural Efficiency: Theory And Evidence From Ethiopia," 2002 Annual meeting, July 28-31, Long Beach, CA 19796, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
    Other versions:
  3. Fan, Shenggen & Fang, Cheng & Zhang, Xiaobo, 2001. "How agricultural research affects urban poverty in developing countries: the case of China," EPTD discussion papers 83, International Food Policy Research Institute (IFPRI). [Downloadable!]
    Other versions:
  4. Jacoby, Hanan G. & Mansuri, Ghazala, 2006. "Incomplete contracts and investment : a study of land tenancy in Pakistan," Policy Research Working Paper Series 3826, The World Bank. [Downloadable!]
  5. Smale, Melinda & Hodgkin, T. & Zohrabian, Armineh & Day-Rubenstein, K., 2001. "The demand for crop genetic resources: international use of the U.S. National Plant Germplasm System," EPTD discussion papers 82, International Food Policy Research Institute (IFPRI). [Downloadable!]
    Other versions:
  6. Cai, Ximing & McKinney, Daene C. & Rosegrant, Mark W., 2001. "Sustainability analysis for irrigation water management: concepts, methodology, and application to the Aral Sea region," EPTD discussion papers 86, International Food Policy Research Institute (IFPRI). [Downloadable!]
  7. Deininger, Klaus & Jin, Songqing & Adenew, Berhanu & Gebre-Selassie, Samuel & Nega, Berhanu, 2003. "Tenure security and land-related investment - evidence from Ethiopia," Policy Research Working Paper Series 2991, The World Bank. [Downloadable!]
    Other versions:
  8. Benin, Samuel & Place, Frank & Nkonya, Ephraim & Pender, John, 2006. "Land Markets and Agricultural Land Use Efficiency and Sustainability: Evidence from East Africa," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25645, International Association of Agricultural Economists. [Downloadable!]
  9. Holden, Stein & Yohannes, Hailu, 2001. "Land redistribution, tenure insecurity, and intensity of production: a study of farm households in southern Ethiopia," CAPRi working papers 21, International Food Policy Research Institute (IFPRI). [Downloadable!]
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