NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
loading...

The Effects of Land Markets on Resource Allocation and Agricultural Productivity

Chaoran Chen, Diego Restuccia, Raül Santaeulàlia-Llopis

NBER Working Paper No. 24034
Issued in November 2017, Revised in March 2020
NBER Program(s):Development Economics, Economic Fluctuations and Growth, Productivity, Innovation, and Entrepreneurship

We assess the effects of land markets on misallocation and productivity by exploiting effective variation in land rentals across time and space arising from a large-scale land certification reform in Ethiopia, where land remains owned by the state. Our main finding from detailed micro panel data is that land rentals substantially reduce misallocation and increase agricultural productivity. Our evidence builds from an empirical difference-in-difference strategy and a calibrated quantitative macroeconomic framework with heterogeneous household-farms that replicates—without targeting—the empirical effects, an outcome that externally validates our model. The empirical effects are nonlinear—impacting more farms farther away from efficient operational scale, consistent with our theory. Further, counterfactual model experiments suggest that the land reform reduces income inequality, is relatively scalable and explains a sizeable proportion of the full extent of misallocation. Additional insights on the role of (in)formality in land markets and its effects on technology adoption are provided.

download in pdf format
   (705 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w24034

Users who downloaded this paper also downloaded* these:
Restuccia and Santaeulàlia-Llopis w23128 Land Misallocation and Productivity
Chari, Liu, Wang, and Wang w24099 Property Rights, Land Misallocation and Agricultural Efficiency in China
Adamopoulos, Brandt, Leight, and Restuccia w23039 Misallocation, Selection and Productivity: A Quantitative Analysis with Panel Data from China
Brown, Ravallion, and van de Walle w24047 Are Poor Individuals Mainly Found in Poor Households? Evidence using Nutrition Data for Africa
Johnson w24027 Measuring Global Value Chains
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us