Farmers' Willingness to Pay for Tenure Security

Abstract

An important aspect of property rights in agrarian societies is the entitlements in land. While there are numerous theoretic formulations showing the impact of secured tenure, there has not been sufficient success in the empirical sphere. This paper tries to obtain ex-ante valuation the improved tenure system of farmers in Ethiopia. The paper also tries to identify factors that trigger the choice for a positive WTP (Willingness to Pay) and those that affect the amount that farmers  would pay for such a change  The results in this paper seem to reinforce the compelling reasons, discussed in the tenure literature, required for having a secured institutional setup for the farmers in Ethiopia. On the basis of this, consequent policy prescription is for the system to move towards a more secured system by banning al efforts of redistribution and allowing the farmers to decide on allocating the resource as they wish to their siblings.