CHAPTER 4
Factor Market Imperfections
and rural Land rental Markets
in Northern Ethiopian Highlands
hen markets are perfect, renting and buying land are closely related. Tenants pay rent to landlords and buyers pay equivalent amounts to banks as interest to loans. In a world, however, with asymmetric information (costly or unavailable) and imperfections in capital and various agricultural input markets, there are good reasons for farm households to prefer transferring land through land rental markets rather than through the formal land sales markets (Sadoulet et al 1998; Chapters 1 and 2).
Besides the acute ...
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