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Land Lease Markets and Agricultural Efficiency in Ethiopia

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  • John Pender
  • Marcel Fafchamps

Abstract

This paper develops a theoretical model of land leasing that includes transaction costs of enforcing labour effort, risk pooling motives and non-tradable capital inputs. We test the implications of this model compared to those of the "Marshallian" (unenforceable labour 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. We find that other household and village characteristics do affect input use and output value, suggesting imperfections in other factor markets. Copyright 2006, Oxford University Press.

Suggested Citation

  • 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.
  • Handle: RePEc:oup:jafrec:v:15:y:2006:i:2:p:251-284
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    References listed on IDEAS

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    1. Clarida, Richard & Gali, Jordi & Gertler, Mark, 1998. "Monetary policy rules in practice Some international evidence," European Economic Review, Elsevier, vol. 42(6), pages 1033-1067, June.
    2. Stasavage, David, 1997. "The CFA Franc Zone and Fiscal Discipline," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 6(1), pages 132-167, March.
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    Cited by:

    1. 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.
    2. Abay, Kibrom A. & Kahsay, Goytom A. & Berhane, Guush, 2014. "Social networks and factor markets: Panel data evidence from Ethiopia:," ESSP working papers 68, International Food Policy Research Institute (IFPRI).
    3. Ghebru, Hosaena H. & Holden, Stein T., 2012. "Reverse-Share-Tenancy and Marshallian Inefficiency: Bargaining Power of Landowners and the Sharecropper’s Productivity," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126883, International Association of Agricultural Economists.
    4. Schumacher, Heiner & Kemper, Niels, 2015. "Unfair Incentives: A Behavioral Note on Sharecropping," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112860, Verein für Socialpolitik / German Economic Association.
    5. Klaus Deininger & Daniel Ayalew Ali & Tekie Alemu, 2008. "Assessing the Functioning of Land Rental Markets in Ethiopia," Economic Development and Cultural Change, University of Chicago Press, vol. 57(1), pages 67-100, October.
    6. Beyene, Abebe D. & Bezabih, Mintewab & Gebreegziabher, Zenebe, 2012. "Contract Duration under Incomplete Land Ownership Rights: Empirical Evidence from Rural Ethiopia," Discussion Papers dp-12-09-efd, Resources For the Future.
    7. Mano, Yukichi & Suzuki, Aya, 2013. "Measuring Agglomeration Economies: The Case of the Ethiopian Cut Flower Industry," Discussion Papers 2013-04, Graduate School of Economics, Hitotsubashi University.
    8. Hagos, Hosaena Gebru & Holden, Stein T., 2013. "Reverse-share-tenancy and Marshallian Inefficiency: Landowners’ bargaining power and sharecroppers’ productivity," IFPRI discussion papers 1270, International Food Policy Research Institute (IFPRI).
    9. Chamberlin, Jordan & Ricker-Gilbert, Jacob, "undated". "Rural land rental markets in Southern Africa: trends, drivers, and impacts on household welfare in Malawi and Zambia," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170434, Agricultural and Applied Economics Association.
    10. Jin, Songqing & Deininger, Klaus, 2009. "Land rental markets in the process of rural structural transformation: Productivity and equity impacts from China," Journal of Comparative Economics, Elsevier, vol. 37(4), pages 629-646, December.
    11. Akpalu, Wisdom & Bezabih, Mintewab, 2014. "Tenure insecurity, climate variability, and renting-out decisions among female small-holder farmers in Ethiopia," WIDER Working Paper Series 140, World Institute for Development Economic Research (UNU-WIDER).
    12. Kassie, Menale & Yesuf, Mahmud & Köhlin, Gunnar, 2008. "The Role of Production Risk in Sustainable Land-Management Technology Adoption in the Ethiopian Highlands," Discussion Papers dp-08-15-efd, Resources For the Future.
    13. Songqing Jin & T. S. Jayne, 2013. "Land Rental Markets in Kenya: Implications for Efficiency, Equity, Household Income, and Poverty," Land Economics, University of Wisconsin Press, vol. 89(2), pages 246-271.
    14. Holden, Stein T. & Deininger, Klaus & Ghebru, Hosaena, 2007. "Impact of Land Certification on Land Rental Market Participation in Tigray Region, Northern Ethiopia," MPRA Paper 5211, University Library of Munich, Germany.
    15. Schmidt, Emily & Bekele, Firew, 2016. "Rural youth and employment in Ethiopia," ESSP working papers 98, International Food Policy Research Institute (IFPRI).
    16. 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.
    17. Yahui Wang & Liangjie Xin & Xiubin Li & Jianzhong Yan, 2016. "Impact of Land Use Rights Transfer on Household Labor Productivity: A Study Applying Propensity Score Matching in Chongqing, China," Sustainability, MDPI, Open Access Journal, vol. 9(1), pages 1-18, December.
    18. Tesfamicheal Wossen & Thomas Berger & Salvatore Di Falco, 2015. "Social capital, risk preference and adoption of improved farm land management practices in Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 46(1), pages 81-97, January.
    19. 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, September.
    20. Aryal, Jeetendra P. & Holden, Stein T., 2011. "Caste, Land and Labor Market Imperfections, and Land Productivity in Rural Nepal," CLTS Working Papers 6/11, Norwegian University of Life Sciences, Centre for Land Tenure Studies.
    21. Bezabih, Mintewab & Kohlin, Gunnar & Mannberg, Andrea, 2011. "Trust, tenure insecurity, and land certification in rural Ethiopia," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(6), pages 833-843.
    22. 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, vol. 37(8), pages 1326-1336, August.
    23. Jayne, T.S. & Chamberlin, Jordan & Headey, Derek D., 2014. "Land pressures, the evolution of farming systems, and development strategies in Africa: A synthesis," Food Policy, Elsevier, vol. 48(C), pages 1-17.
    24. Wineman, Ayala & Liverpool-Tasie, Lenis Saweda, 2016. "Land Markets and Equity of Land Distribution in Northwestern Tanzania," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235893, Agricultural and Applied Economics Association.

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