Land Rental Markets in Kenya: Implications for Efficiency, Equity, Household Income, and Poverty

Abstract

This study uses panel data from 1,142 Kenya smallholder households over four survey periods to examine the determinants of participation in land rental markets and to quantify the impact of renting land on households’ income and poverty status. Overall, the study finds that land rental markets in Kenya promote farm productivity and significantly raise the incomes of land-constrained farm households. However, these percentage increases in the incomes of renters are often not large in absolute terms, and hence participation in rental markets alone is not sufficient to meaningfully affect rural poverty rates. (JEL O12, Q15)