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Land rental markets: experimental evidence from Kenya


Acampora, Michelle; Casaburi, Lorenzo; Willis, Jack (2023). Land rental markets: experimental evidence from Kenya. NBER Working Paper Series 30495, National Bureau of Economic Research.

Abstract

Do land market frictions cause misallocation in agriculture? In a field experiment in Western Kenya, we randomly subsidize owners to rent out land. Transferring cultivation rights to renters increases output and value added on the plots, consistent with imperfect land markets and misallocation, and induced rentals persist after the subsidy ends. Additional analysis provides insights on the magnitude and nature of land frictions - which include search, risks, and learning - and on the sources of gains from trade - which include differences between owners and renters in crop choices, productivity, and financial market constraints, but not in labor constraints.

Abstract

Do land market frictions cause misallocation in agriculture? In a field experiment in Western Kenya, we randomly subsidize owners to rent out land. Transferring cultivation rights to renters increases output and value added on the plots, consistent with imperfect land markets and misallocation, and induced rentals persist after the subsidy ends. Additional analysis provides insights on the magnitude and nature of land frictions - which include search, risks, and learning - and on the sources of gains from trade - which include differences between owners and renters in crop choices, productivity, and financial market constraints, but not in labor constraints.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
JEL Classification:C93, O11, O12, O13, Q15
Scope:Discipline-based scholarship (basic research)
Language:English
Date:December 2023
Deposited On:02 Feb 2023 12:54
Last Modified:06 Mar 2024 14:39
Series Name:NBER Working Paper Series
Number of Pages:90
OA Status:Closed
Publisher DOI:https://doi.org/10.3386/w30495
Official URL:https://www.nber.org/papers/w30495
Other Identification Number:merlin-id:23243
  • Content: Published Version
  • Language: English
  • Permission: Download for registered users
  • Description: Version September 2022
  • Content: Updated Version
  • Language: English
  • Permission: Download for registered users
  • Description: Revised version December 2023