The role of land certification program in stabilizing total consumption expenditure and agricultural investment in rural Ethiopia

Abstract

In developing countries, insecure land rights often hinder agricultural productivity by reducing farmers` incentives to invest in their land, such as fertilizer. Addressing this issue has become a significant research focus in development economics. This study investigates the impact of Ethiopia's land certification program on household consumption expenditures, utilizing a 10-year interval household panel dataset and employing the difference-in-differences (DID) method. The results show that the land certification program led to a significant increase in per capita expenditure (through increases in food, non-food, and total consumption expenditure of 35.1%, 13.3%, and 44.8% respectively), driven by improvements in agricultural income and cereal productivity. These improvements are attributed to the increased use of chemical fertilizers, encouraged by the enhanced security of land tenure. Therefore, the household land certification program can significantly improve food security by promoting farm intensification. The land certification program incentivizes farmers to invest in agricultural inputs, leading to higher productivity and improved livelihoods.