Land Reform and Farm-Household Income Inequality: The Case of Georgia

The income inequality implications of land reform are examined for the case of Georgia using regression-based inequality decomposition techniques. An egalitarian land redistribution is likely to equalize per-capita income among farm households, implying that continuing the land reform process in Georgia is likely to benefit poorer households, relatively speaking. However, land fragmentation was found to be disequalizing, and therefore land market developments that enable plot consolidation are not less important for inequality than the land redistribution itself. Both landholdings and farm assets have favorable inequality implications not only through farm income but also through non-farm income, implying that these productive assets increase the economic opportunities of rural households in the non-farm sector as well, perhaps by easing borrowing constraints.