Working Paper Series in Economics and Institutions of Innovation,
Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

Abstract: This paper studies the effects of land use consolidation on consumption growth of farm households in Rwanda. Data on 1 920 households, observed in two time periods, are used to estimate a first-differenced model using an instrumental variables estimator, which allow the analysis to account for selection bias and placement effects. Results show no significant effect of land use consolidation on consumption growth and the results are robust to changes in model specification and estimation method. Rather, the results point to the importance of factors such as education, rural infrastructure and market linkages in the consumption growth process. These results highlight the need to consider that alternative public investments, that reduce households’ transaction costs, may be better able to target rural farmers that operate under conditions such as land scarcity, high population pressure and high risk linked to rapidly changing climate conditions.

Keywords: land consolidation; consumption; Rwanda; first-difference

JEL-codes: O12; Q15; Q18

23 pages, April 6, 2017

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