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Ethnic divisions, contract choice, and search costs in the Guatemalan land rental market

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  • Macours, Karen

Abstract

This paper shows how ethnic diversity in a context of weak property rights enforcement can result in market segmentation. The paper analyzes how contract enforcement problems affect the joint decision of partner and contract choice by landlords in the land rental market in Guatemala. The empirical method allows partner choice to be determined not only by the characteristics and relative scarcity of the specific landowner and tenant, but also by the characteristics of other potential tenants. The results show that landowners without formal title are more likely to restrict their partners to tenants from the same ethnic group. Partner choice is found to be less important for renting with interlinked land–labor contracts.

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  • Macours, Karen, 2014. "Ethnic divisions, contract choice, and search costs in the Guatemalan land rental market," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 1-18.
    • Handle: RePEc:eee:jcecon:v:42:y:2014:i:1:p:1-18
    DOI: 10.1016/j.jce.2013.08.003
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    Cited by:

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    2. Yahui Wang, 2019. "What Affects Participation in the Farmland Rental Market in Rural China? Evidence from CHARLS," Sustainability, MDPI, vol. 11(24), pages 1-15, December.
    3. Yahui Wang & Liangjie Xin & Xiubin Li & Jianzhong Yan, 2016. "Impact of Land Use Rights Transfer on Household Labor Productivity: A Study Applying Propensity Score Matching in Chongqing, China," Sustainability, MDPI, vol. 9(1), pages 1-18, December.
    4. Letrouit,Lucie Michele Maya & Selod,Harris, 2020. "Trust or Property Rights ? Can Trusted Relationships Substitute for Costly Land Registration in West African Cities ?," Policy Research Working Paper Series 9310, The World Bank.
    5. Ma, Xianlei & Heerink, Nico & van Ierland, Ekko & Lang, Hairu & Shi, Xiaoping, 2020. "Decisions by Chinese households regarding renting in arable land—The impact of tenure security perceptions and trust," China Economic Review, Elsevier, vol. 60(C).
    6. Jia Chen & Jingwen Xu & Hongxiao Zhang, 2022. "Explanation of the Phenomenon “Different Prices on the Same Land” in the Farmland Transfer Market—Evidence from China’s Farmland Transfer Market," Agriculture, MDPI, vol. 12(12), pages 1-13, December.
    7. Ali, Daniel Ayalew & Deininger, Klaus & Duponchel, Marguerite, 2017. "New Ways to Assess and Enhance Land Registry Sustainability: Evidence from Rwanda," World Development, Elsevier, vol. 99(C), pages 377-394.
    8. Yueming Cao & Yunli Bai & Linxiu Zhang, 2022. "Plot Size, Adjacency, and Farmland Rental Contract Choice," Land, MDPI, vol. 11(4), pages 1-21, April.
    9. Dominic Rohner & Mathias Thoenig & Fabrizio Zilibotti, 2013. "Seeds of distrust: conflict in Uganda," Journal of Economic Growth, Springer, vol. 18(3), pages 217-252, September.
    10. Hagos, Hosaena Gebru & Holden, Stein T., 2013. "Reverse-share-tenancy and Marshallian Inefficiency: Landowners’ bargaining power and sharecroppers’ productivity," IFPRI discussion papers 1270, International Food Policy Research Institute (IFPRI).
    11. Cao, Yueming & Bai, Yunli & Zhang, Linxiu, 2021. "Plot Size, Adjacency, and Farmland Rental Contract Choice," 2021 Conference, August 17-31, 2021, Virtual 315378, International Association of Agricultural Economists.
    12. Ghebru, Hosaena H. & Holden, Stein T., 2012. "Reverse-Share-Tenancy and Marshallian Inefficiency: Bargaining Power of Landowners and the Sharecropper’s Productivity," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126883, International Association of Agricultural Economists.
    13. Carla Canelas & Rachel M. Gisselquist, 2017. "Human capital, labour market outcomes, and horizontal inequality in Guatemala," WIDER Working Paper Series 091, World Institute for Development Economic Research (UNU-WIDER).
    14. Carla Canelas & Rachel M. Gisselquist, 2018. "Human capital, labour market outcomes, and horizontal inequality in Guatemala," Oxford Development Studies, Taylor & Francis Journals, vol. 46(3), pages 378-397, July.
    15. Alberto Alesina & Eliana La Ferrara, 2003. "Ethnic Diversity and Economic Performance," Harvard Institute of Economic Research Working Papers 2028, Harvard - Institute of Economic Research.
    16. Jain, Tarun & Sood, Ashima, 2017. "How does relationship-based governance accommodate new entrants? Evidence from the cycle-rickshaw rental market," Journal of Institutional Economics, Cambridge University Press, vol. 13(3), pages 673-697, September.
    17. Matthew Collin, 2013. "Tribe or title? Ethnic enclaves and the demand for formal land tenure in a Tanzanian slum," CSAE Working Paper Series 2013-12, Centre for the Study of African Economies, University of Oxford.
    18. Letrouit, Lucie & Selod, Harris, 2024. "Informal land markets and ethnic kinship in West African cities," Regional Science and Urban Economics, Elsevier, vol. 106(C).
    19. Lucie Letrouit & Harris Selod, 2024. "Informal land markets and ethnic kinship in West African cities [Marchés fonciers informels et cousinage ethnique dans les villes d'Afrique de l'Ouest]," Post-Print hal-04525074, HAL.
    20. Ricker-Gilbert, Jacob & Lunduka, Rodney W. & Kanyamuka, Joseph Samuel & Jumbe, Charles & Kaiyatsa, Stevier & Chamberlin, Jordan, 2017. "Do Farm Land Rental Markets Really Promote Efficiency, Equity and Investment in Smallholder African Agriculture? Evidence from a Matched Tenant-Landlord Survey in Malawi," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258391, Agricultural and Applied Economics Association.
    21. Salena Fay Tramel, 2019. "The Tenure Guidelines in Policy and Practice: Democratizing Land Control in Guatemala," Land, MDPI, vol. 8(11), pages 1-22, November.
    22. Jia Chen & Jingwen Xu & Hongxiao Zhang, 2022. "Impact of Relationship Governance and Third-Party Intervention on Farmland Transfer Rents—Empirical Evidence from Rural China," Land, MDPI, vol. 11(5), pages 1-16, May.
    23. Tang, Liang & Ma, Xianlei & Zhou, Yuepeng & Shi, Xiaoping & Ma, Jia, 2019. "Social relations, public interventions and land rent deviation: Evidence from Jiangsu Province in China," Land Use Policy, Elsevier, vol. 86(C), pages 406-420.
    24. Ma, X. & Zhou, Y. & Heerink, N. & Shi, X. & Liu, H., 2018. "Tenure security, social relations and contract choice: Endogenous matching in the Chinese land rental market," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277478, International Association of Agricultural Economists.
    25. Deininger, Klaus & Jin, Songqing, 2007. "Land rental markets in the process of rural structural transformation : productivity and equity impacts in China," Policy Research Working Paper Series 4454, The World Bank.

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    More about this item

    Keywords

    Ethnic diversity; Land markets; Contract choice; Property rights;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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