DP12136 | Land Trade and Development: A Market Design Approach

Publication Date

07/10/2017

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Abstract

Small farms and fragmented plots are hallmarks of agriculture in less-developed coun- tries, and there is evidence of high returns to land consolidation and reallocation. Complementarities, holdout and asymmetric information mean that private trade will be slow to reallocate land, and imply that market design has the potential to con- tribute to the development process. Complexity concerns are, however, paramount. We present results from a framed field experiment with Kenyan farmers, compar- ing the performance of several continuous-time land exchanges. Farmers are able to achieve high degrees of efficiency, and to comprehend and gain from a relatively com- plicated package exchange.