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Distributional effects of trade costs and land market frictions

Agriculture Ethiopia

Trade costs and land market frictions are characteristic of agricultural markets in many developing countries. While reductions in trade costs affect how inputs are allocated across commodities, reductions in land market frictions affect how inputs are allocated across farmers, who may in turn allocate those inputs to the production of different commodities. The project studies how the effects of reductions in trade costs and reductions in land market frictions interact using two unique natural experiments in Ethiopia. We exploit a large road maintenance and construction project and the rollout of land certification to identify these effects. Results forthcoming.

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