American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Land Rental Markets: Experimental Evidence from Kenya
American Economic Review
vol. 115,
no. 3, March 2025
(pp. 727–71)
Abstract
Do land market frictions cause misallocation in agriculture? In a field experiment in western Kenya, we randomly subsidize owners to rent out land. Induced rentals mostly persist after the subsidy ends and increase output and value added, consistent with misallocation. Gains from trade arise from renters choosing higher-value crops, having higher productivity, and adopting more nonlabor inputs, while renters use similar quantities of labor as owners. Induced rentals are not those with the largest predicted gains, underlining the importance of the joint distribution of gains and frictions, with frictions arising from search, risk, and learning.Citation
Acampora, Michelle, Lorenzo Casaburi, and Jack Willis. 2025. "Land Rental Markets: Experimental Evidence from Kenya." American Economic Review 115 (3): 727–71. DOI: 10.1257/aer.20221234Additional Materials
JEL Classification
- C93 Field Experiments
- O13 Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
- O18 Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- Q12 Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
- Q15 Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
- Q24 Renewable Resources and Conservation: Land
- R52 Regional Government Analysis: Land Use and Other Regulations