Land Rental Markets: Experimental Evidence from Kenya
Michelle Acampora, Lorenzo Casaburi, Jack Willis
American Economic Review · 2025 · Volume 115 · Issue 3
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.
Keywords
Field Experiments, Economic Development: Agriculture, Natural Resources, Energy, Environment, Other Primary Products, Economic Development: Urban, Rural, Regional, and Transportation Analysis, Housing, Infrastructure, Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets, Land Ownership and Tenure, Land Reform, Land Use, Irrigation, Agriculture and Environment, Renewable Resources and Conservation: Land, Regional Government Analysis: Land Use and Other Regulations
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