household electrical appliances), minus debt.<sup>25</sup> The main difference between ISAs and previous LSMS surveys is that in ISAs the quality of capital and its depreciation is measured in a straightforward way by asking: _“How much would you get for this piece of equipment if you sold it now?”_ This selling price accounts for capital quality and depreciation and avoids the alternative use of the age of the assets (with potential recall error) plus assumptions on the depreciation factor to impute the current value of capital (see Deaton (1997)). While we prefer the use of the selling price, this is not without potential measurement error, particularly for assets such as land, for which the market is largely underdeveloped (an issue that we discuss next).<sup>26</sup> The most important components of wealth are land and house values, which are self-reported. This poses a potential measurement problem, particularly for land, which is only partially marketized in rural areas. For example, in the 2010 survey in Malawi households are asked to provide an estimate of the value of their land and all households do so, but more than four-fifths of households live in areas where no market for land operates (see Restuccia and Santaeul`alia-Llopis (2015)). Most land is either granted by a village chief, inherited, or obtained as bride price.<sup>27</sup> The valuation of land is available for all three countries, Malawi, Tanzania, and Uganda. We find the price of land varies considerably across countries. In Malawi, the median and mean prices of an acre are, respectively , US$214 and 473. In Tanzania, the price distribution is much wider, the median and the mean are, respectively, US$136 and 1,762. In Uganda, prices are consistently higher; the median and mean are, respectively, US$ 582 and 1,811. Some of these differences in prices may be driven by differences in land quality. In Uganda and in the north of Tanzania, there are two rain-seasons, the territory is hillier, and there is access to Lake Victoria; the staple crops are also more varied. The average price of land in northern Tanzania, US$2,463 per acre, is similar to Uganda’s. In south-west Tanzania the land and climate are similar to those in Malawi (e.g., there is one rain-season and the main crop is maize). The average price of land in southern Tanzania, US$ 255 per acre, is closer to Malawi’s. It is reassuring that land quality and prices are correlated as this suggests that price differences tend to capture genuine variation.

For Malawi, Restuccia and Santaeul`alia-Llopis (2015) show that the correlation between land

> 25A detailed construction of our wealth measures is available in Appendix Section A.4.

> 26An alternative to measure wealth is the construction of an asset index based on _”yes/no”_ answers to questions about the ownership of each individual asset. However, note that an index cannot be measured in the same units as consumption and income, which limits the comparison between wealth and the remaining economic variables discussed here. Further, an asset index misses some informative aspects of quintile analysis such as the measurement of how much wealth is held by any given proportion of the population (e.g., the top 1% wealth-rich), which we pursue in detail.

> 27In the 2004 survey in Malawi, households are first asked whether there is a market for land in their area; only if the answer is “yes” are they then asked to provide an estimate for land value. We find that 83.0% of households report there is no market for land.

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