Impacts of land certification on land rental markets and regional differential effects in Ethiopia

Secure and transferable land rights are promoted as a key to ensure the reallocation of land to productive users through land rental markets to improve food security and reduce poverty, especially in developing countries. Using a unique nationally representative panel data from the land certification program in Ethiopia, this paper examines the effect of land certification on household’s decision to rent out land and heterogeneity in the impact of the program on rental market participation across regions of the country. We also examined regional rural land regulations that include regulations on rental markets and their implication on rental market development. Using different panel data approaches, we find that improved tenure security through land certification has contributed positively to rental market development in the country. Moreover, we also find evidence of heterogenous effect of land certification on land rental market participation across regions in Ethiopia, where stronger rental market effects are observed in Amhara region and relatively, the effects are significantly lower in the Oromia and the SNNP regions.