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Impact of Land Certification on Land Rental Market Participation in Tigray Region, Northern Ethiopia

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  • Holden, Stein T.
  • Deininger, Klaus
  • Ghebru, Hosaena

Abstract

There is a renewed interest in whether land reforms can contribute to market development in Africa and whether land reforms can be pro-poor. This paper uses unique household panel data from Tigray region in Ethiopia to assess the impact of the 1998 low-cost land registration and certification reform on land rental market participation over a period of eight years after the reform, using random effects probit and tobit panel data models for land leased out and leased in, while correcting for unobservable heterogeneity and endogeneity of having certificate. The analysis revealed that the land reform contributed to increased land rental market participation. Female-headed households became more willing to rent out land and making land available for more efficient producers. Average areas leased out and leased in increased after certification. The land rental market remained characterised with significant and non-convex transaction costs also after the reform as evidenced by significant state dependence, a low response to own holding size and a high share of non-participation in the land market, leaving room for further improvement.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 5211.

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Date of creation: 10 Oct 2007
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Handle: RePEc:pra:mprapa:5211

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Keywords: Land certification; land rental market; panel data analysis; unobserved heterogeneity; household response; female-headed households;

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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), vol. 15(2), pages 251-284, June.
  2. 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.
  3. Jeffrey M. Wooldridge, 2005. "Simple solutions to the initial conditions problem in dynamic, nonlinear panel data models with unobserved heterogeneity," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(1), pages 39-54.
  4. Ravallion, Martin, 2008. "Evaluating Anti-Poverty Programs," Handbook of Development Economics, Elsevier.
  5. Finan, Frederico & Sadoulet, Elisabeth & de Janvry, Alain, 2005. "Measuring the poverty reduction potential of land in rural Mexico," Journal of Development Economics, Elsevier, vol. 77(1), pages 27-51, June.
  6. Teklu, Tesfaye & Lemi, Adugna, 2004. "Factors affecting entry and intensity in informal rental land markets in Southern Ethiopian highlands," Agricultural Economics, Blackwell, vol. 30(2), pages 117-128, March.
  7. Holden, Stein T. & Bezabih, Mintewab, 2006. "Tenure Insecurity, Transaction Costs in the Land Lease Market and their Implications for Gendered Productivity Differentials," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25273, International Association of Agricultural Economists.
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Citations

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Cited by:
  1. Behrman, Julia & Meinzen-Dick, Ruth & Quisumbing, Agnes, 2011. "The gender implications of large-scale land deals:," IFPRI discussion papers 1056, International Food Policy Research Institute (IFPRI).
  2. Hallward-Driemeier, Mary & Gajigo, Ousman, 2013. "Strengthening economic rights and women's occupational choice : the impact of reforming Ethiopia's family law," Policy Research Working Paper Series 6695, The World Bank.
  3. Stephen O'Neill & Kevin Hanrahan, 2010. "The importance of accounting for unobserved heterogeneity, state-dependence and differences in residual variances across groups: An application to Irish Farmers land market participation decisions," Working Papers 1005, Rural Economy and Development Programme,Teagasc.
  4. Derek Stacey, 2011. "Tenure Insecurity, Adverse Selection, and Liquidity in Rural Land Markets," Working Papers 1269, Queen's University, Department of Economics.
  5. Kumar, Neha & Quisumbing, Agnes R., 2012. "Policy reform toward gender equality in Ethiopia: Little by little the egg begins to walk," IFPRI discussion papers 1226, International Food Policy Research Institute (IFPRI).
  6. Quisumbing, Agnes R. & Pandolfelli, Lauren, 2010. "Promising Approaches to Address the Needs of Poor Female Farmers: Resources, Constraints, and Interventions," World Development, Elsevier, vol. 38(4), pages 581-592, April.

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