Transcript Land Property Rights and Agricultural Productivity

Land Property Rights and
Agricultural Productivity:
Evidence from Panama
Gabriel Ivan Fuentes Cordoba
Graduate School of Economics and Management
Tohoku University
Outline
• Introduction
• Motivation
• Panama: Agriculture sector and land tenancy
• Data and Empirical strategy
• Results
• Concluding remarks
Introduction
• Land property rights are key to improving the use of land, encouraging
higher levels of investment and credit, and maximizing allocative
efficiency.
• Land rights provide incentives to invest, land can be used as a
collateral, and land rights can be transferred.
• Brasselle et. all (2002).
Introduction (II)
• According to Besley (1995) property rights:
•
•
•
•
Strengthen the fruits of investment;
Improve access to capital;
Facilitate gains from trade;
Reduce unproductive costs
• Land registration is a common way to ensure land property rights.
Motivation
• Land tenure formalization initiatives have been common in Panama
since the 1960’s. However, in 2010, less than 50% of the agricultural
land was exploited without property rights.
• Does land titling impact agricultural productivity?
• What are the mechanisms through which land titling impacts
productivity?
Agriculture sector in Panama
• From 2005 to 2015 the share of agriculture sector to GDP decreased
from 6.2% to 3.1%. However, it is the second largest employer sector
in Panama.
• Productivity in the agriculture sector is seven times lower than in other
economic sectors.
• Hausmann (2016)
Land tenancy in Panama
• High levels of informality, lack of complete land rights.
• Small land holdings. In 1991 74.8% < 10 ha and 33.6% < 0.1 ha.
• The percentage of agricultural land with registered titles increased
from close to 30% to almost 50% from 1990 to 2010.
Data
• Panama’s Agricultural Census: 1990, 2000 and 2010.
• National Institute of Statistics and Census of Panama
• National Census of Population and Housing: 1990, 2000 and 2010.
• National Institute of Statistics and Census of Panama
• Living Standards Measurement Study 1997 and 2008.
• World Bank and Ministry of Economics and Finance
Empirical Strategy
• District-level panel data with fixed effects for the baseline analysis.
𝑦𝑑𝑡 = 𝛼𝑑 + 𝛽𝑡 + 𝛾𝑥𝑑𝑡 + 𝛿𝑧𝑑𝑡 + 𝜀𝑑𝑡
• 𝑦𝑑𝑡 is the log of agricultural output. 𝛼𝑑 is district fixed effect. 𝛽𝑡
represents time fixed effect. 𝑥𝑑𝑡 stands for land property rights,
defined as the share of private land to the total land used for
agricultural activities. 𝑧𝑑𝑡 is time-variant control variables.
Results
• I divided the aggregated data in two groups:
• Agriculture labor-intensive districts: farmers represent more than 40% of the
total working population.
• Non-agriculture labor intensive districts: farmers are less than 40% of the
working population,.
• The baseline results imply that an increase of the share of private land
leads to a raise in output per cultivated area only in agricultural laborintensive districts.
Table 1: scriptive Statistics
Land rights and agriculture productivity 1990-2010
A: Log rice yield
B: Log labor productivity
All
dataset
(1)
All
dataset
(2)
0.401*
0.427
0.481*
-0.539
0.08
0.265
-0.539
(0.237)
(0.277)
(0.254)
(0.585)
(0.468)
(0.393)
(0.585)
Control Variables
No
Yes
Yes
Yes
Yes
Yes
Yes
District FE
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Year FE
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Observations
171
171
101
70
171
101
101
0.144
0.01
0.077
0.07
0.031
0.005
0.07
Share of agric. land
with complete rights
Adjusted R-squared
farmers>40% farmers<40% All
farmers>40%
(3)
(4)
dataset
(6)
(5)
Note: Robust standard errors are in parenthesis
***, **, * stand for significant at 1%, 5% and 10%. FE means fixed effect
farmers<40%
(7)
Mechanisms
I use household level analysis to explore some mechanisms through which
land rights impacts productivity.
• Access to credit:
• Farmers with registered titles are 3.8% more likely to obtain an agricultural credit
than their counterparts without title, after controlling for plot and household
characteristics.
• Investment:
• The propensity to undertake land-attached investments increases by 2.7% when titling.
Similarly, households with titles are more likely to invest on machinery.
• Tiling does not have any impact on low costs investments as seeds and fertilizers.
Access to credit
Applying for loans
Registered title
Plot and household controls
Year fixed effect
District fixed effect
Observations
(Pseudo) R-squared
Obtaining loans
(1): Probit
(2): OLS
(3): Probit
(4): OLS
0.037***
(3.60)
Yes
No
0.037***
(0.012)
Yes
Yes
0.038***
(3.83)
Yes
No
0.041***
(0.012)
Yes
Yes
No
Yes
No
Yes
2129
2129
2129
2129
0.128
0.085
0.132
0.083
Notes: Probit regression coefficients are average marginal probabilities and robust z-statistics on parentheses.
For linear probability model robust standard errors are in parentheses. ***, **, * Significant at 1%, 5% and 10%
respectively.
Investments
Sheds
(1)
Registered title
0.027**
Trucks
(2)
(3)
Sprayers
(4)
(5)
(6)
Tractors
(7)
(8)
0.036** 0.017**
0.022* 0.076*** 0.085***
0.002
0.006
(2.29)
(0.015)
(2.01)
(0.11)
(3.62)
(0.024)
(0.43)
(0.006)
Plot and household
variables
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Year fixed effect
No
Yes
No
Yes
No
Yes
No
Yes
District fixed effect
No
Yes
No
Yes
No
Yes
No
Yes
Observations
2129
2129
2129
2129
2129
2129
2129
2129
(Pseudo) R-squared
0.151
0.172
0.288
0.183
0.105
0.189
0.269
0.097
Notes: Probit regression coefficients are average marginal probabilities and robust z-statistics on parentheses. For
linear probability model robust standard errors are in parentheses. ***, **, * Significant at 1%, 5% and 10%.
Concluding remarks
• An increase in land rights in agricultural labor-intensive districts is
associated with a rise in land productivity.
• Households with registered land titles are more likely to obtain
agricultural credit, undertake land-attached and land mobile
investments, and use pesticides.
• Owning to data constraints, I could not investigate the impact of land
property rights on land transfers.
• Other studies have also find a positive effect of land titling and
registration of the title in investments.
• Deininger and Chamorro (2004)