This paper studies the relationship between land rights and agricultural productivity. Whereas previous studies used proxies for soil quality and instrumental variables to control for the endogeneity of land titles, the data used here include precise soil quality measurements, which in principle allow controlling for the unobserved heterogeneity between plots. Empirical results suggest that formal land rights (i.e., land titles) have no impact on productivity, but that informal land rights (i.e., landowners’ subjective perceptions of what they can and cannot do with their plots) have heterogeneous impacts on productivity.
That’s the abstract of my paper titled “The Productivity Impacts of Formal and Informal Land Rights: Evidence from Madagascar,” which has just been accepted for publication in Land Economics.
The paper is notable for a few things. First, it shows that land titles have no impact on agricultural productivity in Madagascar, a country where the US government had planned on spending $110 million dollars on various initiatives aimed at “assisting the rural population to transition from subsistence agriculture to a market economy,” including via land titling.
Second, this is one of those rare papers with a “negative finding.” I test the null hypothesis that land titles have no impact on productivity and fail to reject it. A priori, that is not a very strong finding — with 90, 95, or 99 percent of the probability mass on the null hypothesis, depending on the degree of confidence, you are considerably more likely to fail to reject than to reject it.
So to show that what I find is evidence of absence of an impact of land titles on productivity rather than face absence of evidence on the impact of land titles on productivity, I’ve had to conduct every possible robustness check with my data.
Because of the negative finding, the paper went through three rounds of revision — or four submissions total. As someone who does not yet have tenure and for whom time is of the essence, I will always be very grateful to the editor of Land Economics for turning manuscripts around in less than two months (a rarity in economics, where six months is the norm and where I’ve personally experienced up to 11 months for a first response.)
For those of you who are more technically minded, here is a full summary of the paper’s contributions, from the introduction:
First and foremost, the inclusion of precise soil quality measurements allows accounting for an important source of unobserved heterogeneity between plots, which in turn allows eliminating an important source of bias in the estimated relationship between land titles and agricultural productivity – a source of bias that is present in almost all observational studies of the impacts of land rights.
Second, the core finding in this paper – that land titles do not increase productivity in this context – flies in the face of the dominant development discourse, which almost takes the claim that land titles improve productivity as a truism.
Third, this paper studies the impact of informal land rights (i.e., subjective landowner perceptions regarding what they can and cannot do with their plots) alongside formal land rights (i.e., land titles) and shows that these informal land rights have heterogeneous, sometimes unexpected impacts on productivity.
Taken together then, the inclusion of household fixed effects, precise soil quality measurements, as well as formal and informal land rights paint a picture of productivity impacts of land rights that is as complete as possible in the absence of data derived from an experiment specifically aimed at studying the impact of land rights on productivity.