Scandinavian Working Papers in Economics
CLTS Working Papers,
Norwegian University of Life Sciences, Centre for Land Tenure Studies
No 9/26: Who Expands Through Land Rental? Land Ownership Position and Productive Resources in Ethiopia
Stein T. Holden () and Clifton Makate ()
Additional contact information
Stein T. Holden: Centre for Land Tenure Studies, Norwegian University of Life Sciences, Postal: Centre for Land Tenure Studies, Norwegian University of Life Sciences, P.O. Box 5003, NO-1432 Aas, Norway
Clifton Makate: Centre for Land Tenure Studies, Norwegian University of Life Sciences, Postal: Centre for Land Tenure Studies, Norwegian University of Life Sciences, P.O. Box 5003, NO-1432 Aas, Norway
Abstract: Land rental markets allow households to adjust the area they cultivate without changing ownership, but the direction of this adjustment under increasing land scarcity remains contested. We examine whether rental-mediated expansion in Ethiopia is associated with relatively larger local ownership holdings (ownership-scale gravity) or with complementary productive resources relative to land endowments (factor-ratio gravity). Using three rounds of the Ethiopia LSMS-ISA household panel (2011/12–2015/16), we construct upper-envelope ownership holdings to reduce the influence of instability in reported ownership and measure ownership rank within 𝑘𝑒𝑏𝑒𝑙𝑒𝑠. We distinguish tenant participation, rented-in area conditional on tenancy, and rented-in area relative to ownership. Higher local ownership rank is negatively associated with tenant participation and proportional land rental adjustment. Its association with conditional absolute rented-in area is weakly positive and becomes statistically insignificant when contemporaneous hired-labor use and credit access are included. Cultivation capacity (oxen ownership) is positively associated with all three outcomes, and its association diminishes as ownership rank increases. The negative ownership-rank gradient in proportional adjustment persists under alternative treatments of very small ownership holdings. These findings are consistent with factor-ratio gravity facilitating land rental expansion among relatively smaller owners, rather than a uniform pattern of expansion toward larger landowners.
Keywords: agricultural transformation; land rental markets; farm size distribution; reverse tenancy; land scarcity; Ethiopia
Language: English
27 pages, October 11, 2026
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