Does Market Integration Increase Rural Land Inequality? Evidence from India

The robustness of the conclusions is checked by relaxing the exclusion restrictions using the Conley and others (2012) approach, and the bias-adjusted ordinary least squares estimator of Oster (2019) that does not impose any exclusion restrictions. The estimated effects of market access cannot be ac...

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Bibliographic Details
Main Author: Berg, Claudia
Other Authors: Blankespoor, Brian, Shilp, Forhad, Emram, M. Shahe
Format: eBook
Language:English
Published: Washington, D.C The World Bank 2023
Subjects:
Online Access:
Collection: World Bank E-Library Archive - Collection details see MPG.ReNa
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245 0 0 |a Does Market Integration Increase Rural Land Inequality?  |h Elektronische Ressource  |b Evidence from India  |c Claudia Berg 
260 |a Washington, D.C  |b The World Bank  |c 2023 
300 |a 49 pages 
653 |a Increasing Returns 
653 |a Rural Land Policies for Poverty Reduction 
653 |a Gravity Measures 
653 |a Credit Market Imperfections 
653 |a Communities and Human Settlements 
653 |a Landlessness 
653 |a Land Inequality 
653 |a Farming Technology 
653 |a Inequality 
653 |a Golden Quadrilateral 
653 |a Poverty Reduction 
653 |a International Economics and Trade 
653 |a Transport Infrastructure 
653 |a Market Integration 
653 |a Land Administration 
653 |a Rural Roads and Transport 
653 |a Colonial Railroad 
700 1 |a Blankespoor, Brian 
700 1 |a Shilp, Forhad 
700 1 |a Emram, M. Shahe 
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520 |a The robustness of the conclusions is checked by relaxing the exclusion restrictions using the Conley and others (2012) approach, and the bias-adjusted ordinary least squares estimator of Oster (2019) that does not impose any exclusion restrictions. The estimated effects of market access cannot be accounted for by the colonial land revenue system, demographic pressure on land, and differences in inheritance law between the Hindu and Muslim population in a district 
520 |a It develops an instrumental variables approach exploiting two sources of exogenous variation: the location of a rural district relative to the Golden Quadrilateral network (an inconsequential place design) and the length of colonial railroad in the 1880s in a district (a historical infrastructure design). This paper discusses and deals with potential objections to the exclusion restrictions. The evidence suggests that a 10 percent increase in a gravity measure of market access increases the land Gini coefficient by 2.5 percent and the share of landless households by 6.8 percent. This paper finds evidence consistent with the Braverman and Stiglitz (1989) hypothesis that the interaction of credit market imperfections with lower trade costs increases land inequality: a 10 percent increase in market access increases the adoption of increasing returns farming technology by 3.5 percent. There is a positive effect on land sales, but the instrumental variables estimates are imprecise.  
520 |a Investments in transport infrastructure lower trade costs and lead to integration of villages with urban markets. Does spatial market integration increase land inequality in rural areas Theoretical analysis by Braverman and Stiglitz (1989) suggests that the interactions of lower trade costs with credit market imperfections can increase land inequality. The primary mechanism is the adoption of increasing returns technology by large landowners facing lower trade costs which makes it more profitable to expand their scale by buying land from small, credit-constrained farmers. Using high- quality household survey data (the India Human Development Survey) on land ownership in rural districts of India, this paper provides the first evidence on the effects of market integration on land ownership inequality.