Market imperfections and land productivity in the Ethiopian highlands

This study analyses how market imperfections affect land productivity in a degraded low-potential cereal-livestock economy in the Ethiopian highlands. A wide array of variables is used to control for land quality in the analy sis. Results of three different selection models were compared with least s quares models using the HC3 heteroskedasticity-consistent covariance matrix estimator. Market imperfections in labour and land markets were found to a ffect land productivity. Land productivity was positively correlated with h ousehold mate and female labour force per unit of land. Female-headed house holds achieved much lower land productivity than male-headed households. Ol d age of household heads was also correlated with lower land productivity. Imperfections in the rental market for oxen appeared to cause overstocking of oxen by some households. Conservation technologies had no significant po sitive short-run effect on land productivity. The main results were consist ent across the different econometric models.