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Land Consolidation Results from a Randomized Experiment Preliminary Quy-Toan Do Trung Dang Le.

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Presentation on theme: "Land Consolidation Results from a Randomized Experiment Preliminary Quy-Toan Do Trung Dang Le."— Presentation transcript:

1 Land Consolidation Results from a Randomized Experiment Preliminary Quy-Toan Do Trung Dang Le

2 The context Vietnam moved from a centralized economy in 1986 Farmers become residual claimants in 1988 Land law of 1993: Land Use Certificates instituted

3 The question Land reallocation in 1988 based on equity High levels of fragmentation Market institutions in 1993 aimed at reducing fragmentation via market forces Land consolidation did not happen spontaneously

4 Why? Lack of information Lack of coordination Bureaucratic incentives Transaction costs Fragmentation is just optimal as it is

5 Methodological problems Observational data are problematic: differences in land market activity, land market outcomes, or land right regimes can be due to (unobservable) factors that affect socio-economic outcomes Comparing before and after change is also problematic: change in land governance usually comes with a lot of other changes that affect growth

6 Description of our intervention End 2006 – beginning 2007: design of an intervention to trigger land consolidation Three packages: Information campaigns Local cadres training Combined package

7 Description (contd) Sample universe: communes in the North in volunteering provinces that did NOT undertake land consolidation at the time of the intervention Randomized allocation of the packages across four groups (3 treatments and one control group) Communes are communes in the Vietnam Household Living Standards Study panel survey

8 Empirical methodology Baseline data: VHLSS 2004 Household survey: representative at province-level, and detailed agricultural module Intervention: 2006-2007 Follow-up data: Preliminary data from VHLSS 2008 Household survey: panel structure at the commune-level (100%)

9 Empirical methodology (contd) Quantitative impact evaluation: Y ijt = a + X ijt b + cT j + d Year t + g T j *Year t + u ijt Where Y is the outcome of interest X is a vector of household characteristics T is the treatment variable, Year is the year dummy variable u is the error term (allowing for HH, commune FE)

10 Preliminary results Summary statistics Differences at baseline Preliminary look at the results Effect on land fragmentation Effect on land area Effect on agricultural production Effect on income sources

11 Summary statistics 2004 2008 means.d.N means.d.N Total number of plots6.533.9012916.755.061293 Land area12107.0313852.85129115721.4635484.861293 Agricultural costs3691.723940.5612793339.943365.241254 Income sources0.410.1513000.460.171373 gender0.890.3113000.850.351373 age44.8912.16130044.5212.171373 household size4.651.8113004.751.891373 ethnicity0.350.481300 0.310.461373

12 Balance Treatment communesControl communes Household size4.894.83 Poverty headcount0.490.46 Per-capita expenditure2584.752593.22 # income sources4.84.7 Total number of plots5.615.5 Number of annual land plots4.24.23 Cost of ag. Production1867.441985.65 Income diversification (H)0.410.4

13 Results I: land fragmentation # of plots of all land types# of plots of annual land Dummy for treatment0.1-0.02-8.02***0.01-0.09-7.56*** [0.29][0.30][0.73][0.28][0.29][0.67] Dummy: 2008 = 1, 2004 = 01.44***1.74***1.69***1.26***1.52***1.55*** [0.39] [0.43][0.37] [0.39] Treatment*Year 2008==10.290.310.360.30.340.25 [0.64][0.61][0.72][0.60][0.58][0.67] Household characteristicsNoYes NoYes Commune fixed-effectsNo YesNo Yes Observations3136 2584 R-squared0.010.10.510.030.10.56

14 Results II: land area Areas of all land types in logAreas of annual land in log Dummy for treatment-0.02-0.081.29***-0.01-0.08-5.30*** [0.11][0.09][0.22][0.10][0.08][0.07] Dummy: 2008 = 1, 2004 = 0-**-0.04-0.02 [0.10][0.09] [0.08] Treatment*Year 2008==10.02 [0.16][0.14][0.13][0.14][0.12][0.11] Household characteristicsNoYes NoYes Commune fixed-effectsNo YesNo Yes Observations2584 2518 R-squared00.270.640.010.30.71

15 Results III: agricultural production Cost of agricultural production in log Dummy for treatment-0.04 -3.82*** [0.08][0.07] Dummy: 2008 = 1, 2004 = 00.83***0.88***0.86*** [0.08] [0.09] Treatment*Year 2008==1-0.06-0.1-0.03 [0.12][0.11][0.12] Household characteristicsNoYes Commune fixed-effectsNo Yes Observations2533 R-squared0.160.260.64

16 Result IV: Income sources Herfindahl index of income sources Dummy for treatment0.01 0.06*** [0.01] [0.02] Dummy: 2008 = 1, 2004 = 00.01 [0.01] Treatment*Year 2008==10.06*** [0.02] Household characteristicsNoYes Commune fixed-effectsNo Yes Observations2673 R-squared0.050.090.5

17 Conclusion The main contribution is methodological Results are preliminary: no definitive conclusion to be drawn at this early stage

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