Contract Duration under Incomplete Land Ownership Rights: Empirical Evidence from Rural Ethiopia
AbstractUsing the land tenure system in Ethiopia, where all land is state-owned and only farm households have usufruct rights, as a case study, we assessed the links between land owners’ tenure insecurity, associated behavioral factors, and contract length. In this paper, we analyze these links with survey data of rural households in the Amhara National Regional State of Ethiopia. The empirical strategy follows a hazard function model employed in duration data analyses and investigates the fitness of the data to the alternative exponential and Weibull functional forms. The results show that landlords’ risk aversion increases the duration of contracts, which is in line with the reverse tenancy argument that landlords’ risk preferences affect land-contract decisions. The findings of the study also indicate that tenure insecurity is a critical factor in the nature and length of contracts; hence, policies should aim to reduce landlords’ frustrations regarding future land redistribution by the state. An important implication of the results is that secure tenure systems can reduce the disincentives from tenure insecurity due to uncertainty about contract duration and thereby enhance tenants’ welfare. Longer-term and stable contracts can improve the land rental market. In addition, the impact of risk preferences points toward the importance of poverty in the functioning of the land rental market.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Resources For the Future in its series Discussion Papers with number dp-12-09-efd.
Date of creation: 24 Jul 2012
Date of revision:
contract length; tenure insecurity; risk and rate of time preferences; Ethiopia;
Find related papers by JEL classification:
- D2 - Microeconomics - - Production and Organizations
- Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
- Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
This paper has been announced in the following NEP Reports:
- NEP-AGR-2013-05-11 (Agricultural Economics)
- NEP-ALL-2013-05-11 (All new papers)
- NEP-DEV-2013-05-11 (Development)
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.:
- Beyene, Abebe D. & Koch, Steven F., 2013.
"Clean fuel-saving technology adoption in urban Ethiopia,"
Elsevier, vol. 36(C), pages 605-613.
- Abebe Damte & Steven F. Koch, 2011. "Clean Fuel Saving Technology Adoption In Urban Ethiopia," Working Papers 201109, University of Pretoria, Department of Economics.
- Abebe Damte & Steven F. Koch, 2011. "Clean Fuel-Saving Technology Adoption in Urban Ethiopia," Working Papers 229, Economic Research Southern Africa.
- Yesuf, Mahmud & Bluffstone, Randy, 2007. "Risk aversion in low income countries: Experimental evidence from Ethiopia," IFPRI discussion papers 715, International Food Policy Research Institute (IFPRI).
- Pender, John L., 1996. "Discount rates and credit markets: Theory and evidence from rural india," Journal of Development Economics, Elsevier, vol. 50(2), pages 257-296, August.
- Besley, Timothy, 1995. "Property Rights and Investment Incentives: Theory and Evidence from Ghana," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 903-37, October.
- Jonathan Yoder & Ishrat Hossain & Francis Epplin & Damona Doye, 2005.
"Contract Duration and the Division of Labor in Agricultural Land Leases,"
2005-5, School of Economic Sciences, Washington State University.
- Yoder, Jonathan & Hossain, Ishrat & Epplin, Francis & Doye, Damona, 2008. "Contract duration and the division of labor in agricultural land leases," Journal of Economic Behavior & Organization, Elsevier, vol. 65(3-4), pages 714-733, March.
- Jonathan Yoder & Ishrat Hossain & Francis Eppin, 2005. "Contract Duration and the Division of Labor in Agricultural Land Leases," Others 0506011, EconWPA.
- Jonathan Yoder & Ishrat Hossain & Francis Eppin & Damona Doye, 2005. "Contract Duration and the Division of Labor in Agricultural Land Leases," Working Papers 2005-6, School of Economic Sciences, Washington State University.
- Sudhanshu Handa & Steven F. Koch & Shu Wen Ng, 2008. "Child Mortality in Eastern and Southern Africa," Working Papers 200835, University of Pretoria, Department of Economics.
- klemick, Heather & Yesuf, Mahmud, 2008. "Do Discount Rates Change over Time? Experimental Evidence from Ethiopia," Discussion Papers dp-08-06-efd, Resources For the Future.
- Roberto G. Gutierrez, 2002. "Parametric frailty and shared frailty survival models," Stata Journal, StataCorp LP, vol. 2(1), pages 22-44, February.
- Kiefer, Nicholas M, 1988. "Economic Duration Data and Hazard Functions," Journal of Economic Literature, American Economic Association, vol. 26(2), pages 646-79, June.
- Allen, Douglas & Lueck, Dean, 1992. "Contract Choice in Modern Agriculture: Cash Rent versus Cropshare," Journal of Law and Economics, University of Chicago Press, vol. 35(2), pages 397-426, October.
- Bellemare, Marc F., 2009. "The (Im)Possibility of Reverse Share Tenancy," MPRA Paper 23681, University Library of Munich, Germany.
- Teklewold, Hailemariam & Köhlin, Gunnar, 2010. "Risk Preferences as Determinants of Soil Conservation Decisions in Ethiopia," Discussion Papers dp-10-19-efd, Resources For the Future.
- Leggesse Dadi & Michael Burton & Adam Ozanne, 2004. "Duration Analysis of Technological Adoption in Ethiopian Agriculture," Journal of Agricultural Economics, Wiley Blackwell, vol. 55(3), pages 613-631.
- Menale Kassie & Stein Holden, 2007. "Sharecropping efficiency in Ethiopia: threats of eviction and kinship," Agricultural Economics, International Association of Agricultural Economists, vol. 37(2-3), pages 179-188, 09.
- Stiglitz, Joseph E, 1974.
"Incentives and Risk Sharing in Sharecropping,"
Review of Economic Studies,
Wiley Blackwell, vol. 41(2), pages 219-55, April.
- Deininger, Klaus & Ali, Daniel Ayalew & Holden, Stein & Zevenbergen, Jaap, 2008.
"Rural Land Certification in Ethiopia: Process, Initial Impact, and Implications for Other African Countries,"
Elsevier, vol. 36(10), pages 1786-1812, October.
- 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.
- 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.
- Samuel Benin & Mohamed Ahmed & John Pender & Simeon Ehui, 2005. "Development of Land Rental Markets and Agricultural Productivity Growth: The Case of Northern Ethiopia," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 14(1), pages 21-54, March.
- Hoben, Allan, 1995. "Paradigms and politics: The cultural construction of environmental policy in Ethiopia," World Development, Elsevier, vol. 23(6), pages 1007-1021, June.
- Gavian, Sarah & Ehui, Simeon, 1999. "Measuring the production efficiency of alternative land tenure contracts in a mixed crop-livestock system in Ethiopia," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 20(1), January.
- Timothy H. Hannan & John M. McDowell, 1984. "The Determinants of Technology Adoption: The Case of the Banking Firm," RAND Journal of Economics, The RAND Corporation, vol. 15(3), pages 328-335, Autumn.
- Eswaran, Mukesh & Kotwal, Ashok, 1986. "Access to Capital and Agrarian Production Organisation," Economic Journal, Royal Economic Society, vol. 96(382), pages 482-98, June.
- 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.
- Deininger, Klaus & Jin, Songqing, 2006. "Tenure security and land-related investment: Evidence from Ethiopia," European Economic Review, Elsevier, vol. 50(5), pages 1245-1277, July.
- 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.
- Gavian, Sarah & Ehui, Simeon, 1999. "Measuring the production efficiency of alternative land tenure contracts in a mixed crop-livestock system in Ethiopia," Agricultural Economics, Blackwell, vol. 20(1), pages 37-49, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Webmaster).
If references are entirely missing, you can add them using this form.