Land Rental Markets: Experimental Evidence from Kenya

Please send an email to Nadine Ketel or Paul Muller if you are interested to participate in this seminar (series).

Abstract:
In much of Sub-Saharan Africa, land markets operate far from perfectly, with land allocations largely determined by inheritance. Such frictions are argued to affect three broad outcomes: efficiency, by inducing misallocation; equity, by preventing land redistribution and / or land concentration; and structural transformation, by changing plot owners' labor supply. To provide evidence for these effects, we undertake one of the first experiments on land markets, focusing on agricultural rentals in Kenya. We provide landowners with incentives to rent out one of their plots - undoing part of the market wedges - and evaluate the effect of the induced rentals on owner and plot-level outcomes. A further experimental treatment, together with comparisons of renters and owners, enable us to speak to mechanisms. Joint work with Michelle Acampora and Jack Willis.