This paper looks at the role of market imperfections in explaining leasing behaviour of households using sample data from the Highlands of Eritrea. It looks at the tenancy or land rental market, the position of households in that market (as landlords, tenants or non-participants) and assesses the transaction costs related to the adjustment process in the tenancy market.The paper tests for fixed and variable transaction costs related to adjustment in the land rental market. A two-stage approach for participation in the market as landlords or tenants is used for this. Data from 32 villages in the highlands of Eritrea are used for the analysis. It offers:a literature surveya leasing model under imperfect markets for non-land factors and develop a set of testable hypothesesan outline of the econometric models and discussion of estimation methods a presention of the data and discussion of the results based on informal and formal analysis of the dataThe analysis demonstrates the importance of the land rental market for adjustment to nontradable or semitradable non-land household endowments. There were indications of significantly higher fixed transaction costs faced by potential tenants than by potential landlords.
Authors and Publishers
NMBU's mission is to contribute to the well-being of the planet. Our interdisciplinary research generates innovations in food, health, environmental protection, climate and sustainable use of natural resources.
NMBU's research is enabling people all over the world to tackle the big, global challenges regarding the environment, sustainable development, how to improve human and animal health, renewable energy sources, food production, and land- and resource management.
Eldis is an online information service providing free access to relevant, up-to-date and diverse research on international development issues. The database includes over 40,000 summaries and provides free links to full-text research and policy documents from over 8,000 publishers. Each document is selected by members of our editorial team.