Land Regularization and Technical Efficiency in Agricultural Production: An Empirical Study in Andean Countries
Peer Reviewed
Date issued
May 2024
Journal version
Subject
Land Titling;
Land Tenure;
Agricultural Productivity;
Small Farms;
Investment;
Rural Development
JEL code
C31 - Cross-Sectional Models • Spatial Models • Treatment Effect Models • Quantile Regressions • Social Interaction Models;
O12 - Microeconomic Analyses of Economic Development;
O13 - Agriculture • Natural Resources • Energy • Environment • Other Primary Products;
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;
Q18 - Agricultural Policy • Food Policy
Country
Bolivia;
Ecuador;
Peru
IDB series
Impact Evaluations
Category
Discussion Papers
This study evaluates the impact of land tenure security on technical efficiency of smallholder farmers in the three countries of the Andean region, Bolivia, Ecuador and Peru. Using cross-sectional data for 5,288 smallholder farmer households, we employ a multi-stage methodology, including propensity score matching, selectivity bias-corrected stochastic production frontier, and meta frontier analysis to address concerns relating to endogeneity. Results reveal that farmers who hold a formal land title on average exhibit technical efficiency that is 38.6% higher than among farmers without legal title, though effects and magnitudes vary by country. Furthermore, we explore the pathways through which tenure security may affect technical efficiency and find that possessing legal title is associated with higher likelihood of accessing credit and making productive investments in land. Our findings imply that comprehensive land regularization is crucial to enhancing agricultural productivity levels among smallholder farmers in the region.
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