Abstract of the paper
Although theory predicts that better property rights to land can increase land productivity either through long-term investment effects and/or more efficient input use due to enhanced tradability of the land, empirical studies on the size and magnitude of these effects are very scarce.
Taking advantage of unique quasi-experimental survey design, this study analyzes productivity impacts of the Ethiopian land certification program by identifying how investment effects (technological gains) would measure up against benefits from any improvements in input use intensity (technical efficiency). We adopted a data envelopment analysis–based Malmquist-type productivity index to decompose productivity differences into (1) within-group farm efficiency differences (technical efficiency effect, and (2) differences in the group production frontier (longterm investment or technological effects).
The results show that farms without a land use certificate, on aggregate, are less productive than those with formalized use rights. We found no evidence to suggest this productivity difference is due to inferior technical efficiency. Rather, the reason is down to technological advantages, or a favorable investment effect, from which farm plots with a land use certificate benefit when evaluated against farms not included in the certification program.