4700 Keele St.
Toronto, ON M3J 1P3
Information about this author at RePEc
NBER Working Papers and Publications
|November 2017||The Effects of Land Markets on Resource Allocation and Agricultural Productivity|
with Diego Restuccia, Raül Santaeulàlia-Llopis: w24034
We assess the effects of land markets on misallocation and productivity by exploiting policy-driven 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, an instrumental variable approach, and a calibrated quantitative macroeconomic framework with heterogeneous household-farms that replicates—without targeting—the empirical effects. These effects are nonlinear—impacting more farms farther away from efficient operational scale, consistent with our theory. Using our model, we find ...