Who Expands Through Land Rental? Land Ownership Position and Productive Resources in Ethiopia

Stein Holden () and Clifton Makate ()
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Clifton Makate: Centre for Land Tenure Studies, Norwegian University of Life Sciences, Postal: Centre for Land Tenure Studies, Norwegian University of Life Sciences, P.O. Box 5003, NO-1432 Aas, Norway

No 9/26, CLTS Working Papers from Norwegian University of Life Sciences, Centre for Land Tenure Studies

Abstract: Land rental markets allow households to adjust the area they cultivate without changing ownership, but the direction of this adjustment under increasing land scarcity remains contested. We examine whether rental-mediated expansion in Ethiopia is associated with relatively larger local ownership holdings (ownership-scale gravity) or with complementary productive resources relative to land endowments (factor-ratio gravity). Using three rounds of the Ethiopia LSMS-ISA household panel (2011/12–2015/16), we construct upper-envelope ownership holdings to reduce the influence of instability in reported ownership and measure ownership rank within 𝑘𝑒𝑏𝑒𝑙𝑒𝑠. We distinguish tenant participation, rented-in area conditional on tenancy, and rented-in area relative to ownership. Higher local ownership rank is negatively associated with tenant participation and proportional land rental adjustment. Its association with conditional absolute rented-in area is weakly positive and becomes statistically insignificant when contemporaneous hired-labor use and credit access are included. Cultivation capacity (oxen ownership) is positively associated with all three outcomes, and its association diminishes as ownership rank increases. The negative ownership-rank gradient in proportional adjustment persists under alternative treatments of very small ownership holdings. These findings are consistent with factor-ratio gravity facilitating land rental expansion among relatively smaller owners, rather than a uniform pattern of expansion toward larger landowners.

Keywords: agricultural transformation; land rental markets; farm size distribution; reverse tenancy; land scarcity; Ethiopia (search for similar items in EconPapers)
JEL-codes: C12 O13 O15 Q15 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2026-10-11
New Economics Papers: this item is included in nep-mac
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