Land markets can have potentially divergent effects on the distribution of land. While they may lead to a concentration of land in the hands of a wealthy minority, they can also enhance equity by serving as an alternative avenue of land access for those with a limited inheritance. This paper explores the equity implications of land sales and rental markets in northwestern Tanzania. Using household-level data collected in 2014 and a control function approach to address potential endogeneity, we find that the land market enables households to adjust their farm size to compensate for a small inheritance. The rental market is particularly used by those with no inheritance to secure a landholding, while households with a larger initial endowment are more likely to dispose of land. Our results indicate that the local land market, characterized by widespread participation, ultimately increases the equity of land distribution.


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