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Land Market Development and Agricultural Production Efficiency in Albania

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  • Deininger, Klaus W.
  • Carletto, Calogero
  • Savastano, Sara

Abstract

We make use of data from the 2005 Albania Living Standard Measurement Survey to investigate the factors affecting household agriculture efficiency and land market development. To assess the functioning of land rental markets and explore efficiency- and equity impacts of land rental, we use a model of producers who differ in endowments and skills and who face imperfect labor markets and transaction costs. The empirical evidence, of a stochastic frontier estimate, shows that productivity is low and most farms are inefficiently utilized. The average level of agriculture efficiency among rural household is very less than 30% but household that rent in land are more efficient. However, results from a probit regression on rental market participation shows that rental market helps to transfer land to more efficient producers. However, several constraints in credit market, input, labor, and the lack of irrigation are outweighing the productivity advantage of the tenants. In addition to that, land market development is delayed by remaining restrictions and high transaction cost. To overcome these limitations as well as inadequate system of land title registration, household are using informal land transactions, such as inheritance, in order to increase farming efficiency.

Suggested Citation

  • Deininger, Klaus W. & Carletto, Calogero & Savastano, Sara, 2007. "Land Market Development and Agricultural Production Efficiency in Albania," 104th Seminar, September 5-8, 2007, Budapest, Hungary 7817, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa104:7817
    DOI: 10.22004/ag.econ.7817
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    Cited by:

    1. Babatunde, Raphael O., 2013. "On-Farm and Off-farm Works: Complement or Substitute? Evidence from Rural Nigeria," 2013 Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 160437, African Association of Agricultural Economists (AAAE).
    2. Qineti, Artan & Rajcaniova, Miroslava & Braha, Kushtrim & Ciaian, Pavel & Demaj, Jona, 2014. "When land markets 'do not work' and status-quo agrarian structures persist: A case study from rural Albania," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182976, European Association of Agricultural Economists.
    3. Jilito, Mideksa Fufa & Okoyo, Eric Ndemo & Moges, Dereje Kifle, 2021. "Income Diversification Sources, Constraints, and Measurements: Evidence from Agarfa District, Southeastern Ethiopia," International Journal of Agricultural Management and Development (IJAMAD), Iranian Association of Agricultural Economics, vol. 11(1), June.
    4. Kurup, Hari K K & Sumayya, B K, 2009. "Land market responses to economic recession in Kerala," MPRA Paper 20109, University Library of Munich, Germany.
    5. Jarmila Lazíková & Ľubica Rumanovská & Ivan Takáč & Piotr Prus & Alexander Fehér, 2021. "Regional Differences of Agricultural Land Market in Slovakia: A Challenge for Sustainable Agriculture," Agriculture, MDPI, vol. 11(4), pages 1-20, April.
    6. Talip Kilic & Calogero Carletto & Juna Miluka & Sara Savastano, 2009. "Rural nonfarm income and its impact on agriculture: evidence from Albania," Agricultural Economics, International Association of Agricultural Economists, vol. 40(2), pages 139-160, March.

    More about this item

    Keywords

    Farm Management; Land Economics/Use;

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