three, we expect households whose past experience in off-farm<sup>labormarketsreflectsgreater</sup> opportunities for such employment to be less likely to rent in and<sup>morelikely to rent out andthe levelof</sup> rental market activity in general to increase with development of the<sup>off-farmeconomy in a community as</sup> measured by the share of income derived from non-agricultural sources.

The equation to be estimated for participation in land sales<sup>marketsissimilar,withthe onlydifference</sup> being that the dependent variable now refers to land purchases<sup>duringthe5-yearperiodprecedingthe</sup> survey and that a number of the dependent variables refer to initial<sup>conditions rather than,as in the case of</sup> rental markets, contemporaneous ones. Formally, we estimate _Pi = o + ,,ai + 2 Ai + 3f Xi +fl4O, +f 5 C, + 6Ti + PA + ASIC + e 1 (7)_ where Pi is a dummy for participation in sale or purchase markets<sup>or the area involved,respectively,a, is</sup> agricultural ability, Ai is the household's initial (1993) per capita<sup>land endowment,</sup><sup>_Xi_is a vector of initial</sup> household characteristics including age, sex, the head's education,<sup>initialassetendowment, andinitial</sup> consumption. The remaining variables, _0,, Si, T,_ and C, are defined<sup>as above and the onlydifferenceis that</sup> we add a interaction between Si and Cl. The rationale for doing<sup>soisthat,asdiscussed above,in</sup> environments where credit markets do not function well, distress<sup>salescould be a mainsourceof supply</sup> of land to the sales market, something that can be tested by including<sup>this interaction.</sup> Recall from our earlier discussion that we expect that initial wealth<sup>is moreimportant asa determinantof</sup> land purchases than rentals. Second, even though we would expect<sup>households' abilityto increasetheir</sup> demand for cultivable land, the variable would be less important<sup>insales markets.Thus,althoughwe</sup> would still expect ,B> 0 and _f13_ **<** 0 in the purchase equation<sup>andoppositein thesalesequation,the</sup> magnitude and significance of the coefficients is expected to be lower<sup>in thelatterwherewe alsoexpect</sup> agricultural assets to be of greater importance. In addition to<sup>continuingimportanceof bothtransaction</sup> costs and off-farm labor market opportunities, we also expect<sup>that permanent land transactionsboth credit</sup> market access and having experienced a shocks in the past will<sup>beimportant.With presenceof financing</sup> constraints, we expect availability of credit to increase households'<sup>propensitytopurchase land.At the</sup> same time shocks, especially in environments where credit markets<sup>arethin,mayforcehouseholdsto</sup> undertake distress sales, thus having a positive impact on land sales<sup>but not on land purchases.</sup> 3. 1Data sources and descriptive evidence Before discussing econometric results, we highlight some salient<sup>featuresof Vietnam'srural economyby</sup> presenting evidence on socio-economic characteristics and changes<sup>inlandmarketparticipationover</sup> time. The data illustrate the considerable reduction of poverty<sup>achievedthroughhigh levelsof recent</sup> economic growth and off-farm development but also a point towards<sup>considerable,thoughregionally</sup> differentiated, increase in land market activity.

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