Does Understanding Land Tenure Security (LTS) Increase Investments in Agriculture? Evidence from Rural Households in Vietnam
IDEC-DP2_09-2.pdf 522 KB
Vu, Thu Ha
understanding land tenure security (LTS)
Although previous studies have shown the importance to agricultural investments of understanding land tenure security (LTS), to date, little quantitative evidence has been published regarding the effects of understanding LTS. This study contributes to the current research by showing the causal effect on agricultural investments of understanding LTS. In detail, we examine whether understanding the increase in the duration of agricultural land-use rights improves farmers’ investments in agriculture. Under the new land law passed in November 2013 in Vietnam, the usage duration of annual cropland and aquaculture land increased significantly from 20 years to 50 years, which makes Vietnam a compelling case study for testing this hypothesis. We use panel data from the Viet Nam Access to Resources Household Survey (VARHS) collected in 2010, 2012, 2014 and 2016. The balanced panel data include 1834 households. Difference-in-difference with fixed effects (DID-FE) is employed to estimate the causal impacts. We find that understanding the increase in the duration of agricultural land-use rights increases investments in irrigation/soil conservation/water conservation and the adoption of organic fertilizer, which supports the positive impacts of understanding LTS on sustainable investments.
IDEC DP2 Series