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Abstract

This article uses nationally representative panel survey data from Malawi and Zambia to estimate the factors affecting a smallholder farm household’s decision to participate in land rental markets as either a tenant or a landlord. We also estimate how land rental market participation influences various measures of household income and welfare. We find that land rental markets in both Malawi and Zambia promote efficiency by transferring land from less able to more able farmers. Land rental markets in Malawi promote equity by transferring land relatively labor-poor to labor-rich households, and in both countries we find evidence that land markets transfer land from land-rich to land-poor households. In both countries, we find evidence that renting in land has a positive effect on household income and reduces the probability of the household being in poverty. However, when we consider the full cost of renting in land, the positive impacts are much lower.

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