Adaptation to Natural Disasters through the Agricultural Land Rental Market: Evidence from Bangladesh

Shaikh M. S. U. Eskander; Edward B. Barbier

doi:10.3368/le.032421-0031R

Article Figures & Data

Figures

Tables
Additional Files

Download figure
Open in new tab
Download powerpoint
Figure 1
Distributions of Land Rental Transactions
Download figure
Open in new tab
Download powerpoint
Figure 2
Land Rental Transactions by Year and Disaster

View popup

Table 1

Summary Statistics

Variable	Description	Survey Rounds
Variable	Description	BIHS 2011	BIHS 2015
Flood	1 if the household was exposed to floods between BIHS 1 and 2; 0 if not	0.0314	0.0314
Flood		(0.174)	(0.174)
Storm	1 if the household was exposed to storms between BIHS 1 and 2; 0 if not	0.0324	0.0324
Storm		(0.177)	(0.177)
Profit	Total farm profits from cultivation, adjusted for rental transactions and costs of production	1.695	0.887
Profit		(2.734)	(1.924)
Tenants	1 if participates in rent-in transactions; 0 otherwise	0.399	0.366
Tenants	1 if participates in rent-in transactions; 0 otherwise	(0.490)	(0.482)
Rent-in land	Total area of rented in and operated arable land (ha)	0.130	0.124
Rent-in land	Total area of rented in and operated arable land (ha)	(0.268)	(0.301)
Landlords	1 if participates in rent-out transactions; 0 otherwise	0.220	0.256
Landlords	1 if participates in rent-out transactions; 0 otherwise	(0.414)	(0.436)
Rent-out land	Total area of rent-out arable land (ha)	0.0766	0.0903
Rent-out land	Total area of rent-out arable land (ha)	(0.259)	(0.275)
Landholding	Total area of owned arable land (ha)	0.208	0.218
Landholding	Total area of owned arable land (ha)	(0.427)	(0.450)
Age	Age of the household head (completed years)	44.99	47.84
Age	Age of the household head (completed years)	(13.68)	(13.35)
Family size	Number of family members in the household	4.245	4.875
Family size	Number of family members in the household	(1.562)	(1.827)
Education	Years of education of the highest educated family member	6.612	7.452
Education	Years of education of the highest educated family member	(3.657)	(3.604)
Extension	1 if the household was in contact with agricultural extension services in the last 12 months; 0 otherwise	0.0727	0.0811
Extension		(0.260)	(0.273)
Subsidy	1 if the household holds an agricultural subsidy card; 0 otherwise	0.105	0.168
Subsidy		(0.307)	(0.374)
Transportation	1 if the household is located within 1 km of a bus stop, main road, or train station; 0 otherwise	0.621	0.701
Transportation		(0.485)	(0.458)
Finance	1 if the household is located within 2 km of a bank or a microfinance NGO; 0 otherwise	0.264	0.242
Finance		(0.441)	(0.428)
Tractor	1 if the household owns a tractor or plow-yoke; 0 otherwise	0.109	0.0764
Tractor	1 if the household owns a tractor or plow-yoke; 0 otherwise	(0.311)	(0.266)
Idiosyncratic shock	1 if the household experienced any idiosyncratic shocks between BIHS 1 and 2; 0 if not	0.363	0.363
Idiosyncratic shock		(0.481)	(0.481)
Rainfall deviation	Deviation of monsoon rainfall from long-term average level of rainfall	−18.92	−21.86
Rainfall deviation		(25.02)	(23.49)

Note: Standard deviations are shown in parentheses. All data are from the Bangladesh Integrated Household Survey (BIHS) data set rounds 1 and 2. All monetary values are expressed in thousands of US$ in purchasing power parity terms at the rates 26.61 and 21.87 Bangladeshi taka for BIHS rounds 1 and 2, respectively. All land measures are expressed in hectares, where 100 decimals = 1 acre = 0.405 ha.

View popup

Table 2

Participation and Transaction Decisions

Variable	Participation		Transactions
Variable	Pr(Rent In)	Pr(Rent Out)	Rent In	Rent Out
Flood × postyear	0.046	0.029	0.314^**	0.339
Flood × postyear	(0.060)	(0.055)	(0.144)	(0.250)
Storm × postyear	0.047	0.021	0.132	0.335^**
Storm × postyear	(0.049)	(0.039)	(0.101)	(0.133)
Age	0.005	0.002	0.021^**	0.025^*
Age	(0.005)	(0.003)	(0.010)	(0.013)
Family size	0.003	−0.003	0.056^*	0.001
Family size	(0.011)	(0.009)	(0.030)	(0.036)
Landholding	−0.267^***	0.501^***	−0.904^***	1.103^***
Landholding	(0.073)	(0.088)	(0.198)	(0.287)
Education	0.004	−0.000	0.020^**	−0.021
Education	(0.004)	(0.003)	(0.010)	(0.016)
Extension	0.091^***	−0.001	0.205^***	0.047
Extension	(0.026)	(0.022)	(0.054)	(0.136)
Subsidy	0.044^*	−0.019	0.080	0.024
Subsidy	(0.023)	(0.021)	(0.067)	(0.101)
Transportation	0.026^*	0.015	0.085^**	0.060
Transportation	(0.014)	(0.014)	(0.038)	(0.048)
Finance	0.014	0.003	−0.042	−0.023
Finance	(0.016)	(0.015)	(0.044)	(0.069)
Tractor	0.079^*	−0.053	0.207^***	−0.097
Tractor	(0.043)	(0.035)	(0.075)	(0.185)
Idiosyncratic shocks x postyear	0.013	0.020	0.032	0.126
Idiosyncratic shocks x postyear	(0.020)	(0.017)	(0.067)	(0.078)
Rainfall deviation	−0.000	0.000	0.001	−0.001
Rainfall deviation	(0.000)	(0.000)	(0.001)	(0.001)
Rainfall deviation x postyear	0.000	−0.001	0.001	−0.001
Rainfall deviation x postyear	(0.001)	(0.000)	(0.001)	(0.002)
Constant	0.139	0.043	−2.245^***	−3.153^***
Constant	(0.229)	(0.151)	(0.502)	(0.606)
Observations	9,578	9,578	4,798	2,986
R-squared/pseudo R-squared	0.777	0.802	0.214	0.309
HH fixed effect	Yes	Yes	Yes	Yes
Year fixed effect	Yes	Yes	Yes	Yes

Note: Robust standard errors clustered at the union level are shown in parentheses. The results for participation choices are from linear probability model regressions with two-way fixed effects according to specification [5]; the results for rental transactions are from Poisson pseudo-maximum likelihood regressions with two-way fixed effects according to specification [6]. Outcome and explanatory variables follow the definitions in Table 3. All monetary values are expressed in thousands of US$ in purchasing power parity terms at the rates 26.61 and 21.87 Bangladeshi taka for Bangladesh Integrated Household Survey data set rounds 1 and 2, respectively. All land measures are expressed in hectares, where 100 decimals = 1 acre = 0.405 ha.
↵* p < 0.1;
↵** p < 0.05;
↵*** p < 0.01.

View popup

Table 3

Effects on Agricultural Income

Variable	Rent In	Rent Out
Land rent in	0.571
Land rent in	(0.713)
Land rent out		−0.091
Land rent out		(0.083)
Flood × postyear	−0.570^*	−0.470
Flood × postyear	(0.339)	(0.301)
Storm × postyear	−0.788^***	−0.751^***
Storm × postyear	(0.283)	(0.278)
Constant	1.116^***	1.370^***
Constant	(0.281)	(0.028)
Observations	9,578	9,578
R-squared	0.818	0.819
HH fixed effect	Yes	Yes
Year fixed effect	Yes	Yes

Note: Standard errors are shown in parentheses. The two-way fixed-effect panel regression models follow specification [7]. Outcome and explanatory variables follow the definitions in Table 3. All monetary values are expressed in thousands of US$ in purchasing power parity terms at the rates 26.61 and 21.87 Bangladeshi taka for Bangladesh Integrated Household Survey data set rounds 1 and 2, respectively. All land measures are expressed in hectares, where 100 decimals = 1 acre = 0.405 ha.
↵* p < 0.1;
** p < 0.05;
↵*** p < 0.01.

View popup

Table 4

Rent-In and Rent-Out Margins

Margin	Rent-In Margins				Rent-Out Margins
Margin	Mean	SD	Min.	Max.	Mean	SD	Min.	Max.
Flood
Intensive margin	−0.570	0	−0.570	−0.570	−0.470	0	−0.470	−0.470
Extensive margin	0.0116	0.0130	0.000172	0.221	−0.00291	0.00467	−0.0765	−7.34e-05
Total margin	−0.559	0.0130	−0.570	−0.349	−0.473	0.00467	−0.546	−0.470
Storm
Intensive margin	−0.788	0	−0.788	−0.788	−0.751	0	−0.751	−0.751
Extensive margin	0.00487	0.00532	7.25e-05	0.0933	−0.00282	0.00450	−0.0755	−7.25e-05
Total margin	−0.784	0.00532	−0.788	−0.695	−0.754	0.00450	−0.827	−0.751