While rent-out households may have moved out, tenants will remain in the sample, allowing us to independently check the above results and to derive a more robust measure of the income change due to land rental. We do so by running a household fixed effect regression of net income (after rental fees) on area rented in and year dummies to control for time varying factors, we find that, while year dummies are highly significant, renting in increases incomes for the same household by about 10% (t of 4.56). Concerns that reliance on land markets would have a negative equity impact as compared to making land available “for free” through administrative means thus have little empirical foundation.

As any sustained income gains beyond zero-sum redistribution need to be supported by higher levels of productivity, closer scrutiny of this variable will be of interest. Data on net revenues excluding family labor from a plot before and after it had been rented support the hypotheses of significant improvements in productivity through land rental (Table 3). With a gain of 267 or 283 Y/mu amounting to an increase in net revenues of 84% or 83%,<sup>9</sup> figures obtained from tenants and landlords, respectively, are surprisingly consistent.<sup>10</sup> With rental payments inclusive of taxes amounting to about 90 Y/mu, about two thirds of the surplus from land rental accrues to tenants and one third to those renting out. With a mean of 3 mu per land transaction, the increase in net income for the tenant due to rental market participation amounts to about 550 Y. Although the difference used above nets out unobservable but time invariant plot characteristics such as soil quality, the estimated productivity impact of land rental will be biased upwards by any independent changes in productivity, e.g. due to technical change. To adjust this, we pool data for changes in net income at the plot level as reported by rental market participants with the difference in net revenue between 2001 and 2004 per mu ( _Δy_ ) for the 6100 households who remained in autarky throughout the period (essentially treating the entire household as one plot), to obtain a sample of 7,968 observations.<sup>11</sup> Letting _R_<sup>_in_</sup> and _R_<sup>_out_</sup> be dummies for renting in and out and _D_ a vector of regional dummies, the coefficients _α1_ and _α2_ in a regression of the form _Δy =α0+ α1 R_<sup>_in_</sup> _+ α2R_<sup>_out_</sup> _+βD_ provide an estimate of net productivity increases due to rental. With values of 186 Y/mu for _α1_ and 180 Y/mu for _α2_ (t-statistics of 4.75 and 3.24; _R_<sup>_2_</sup> of 0.56), estimates suggest productivity increase of slightly below 60% due to land rental.

To assess whether rental fully capitalized on available opportunities, we use households’ subjective perception of constraints and systematic differences in productivity changes between land rented to relatives and non-relatives. Concerning perceptions, households were asked whether they ever wanted to rent out (or in) more than they could obtain in the market and whether they feel confident that in the future they will be able to use rental to fully adjust to the desired level of operational land holding.

> 9 If both apply equivalent amounts of family labor, the change in net revenue is equivalent to an increase in productivity. As, with 81 versus 91 days per mu, renters actually spend slightly less time on agricultural activities than autarkic cultivators, this assumption seems justified. 10 Recall that, in cases where the landlord migrated out, asking the tenant is the only feasible way of obtaining such information. As we are using brackets and broad job categories, information obtained from both partners in the pre-test for cases where doing so was feasible was internally very consistent.

> 11 If higher managerial ability by rent-in households imply a systematic difference in the _rate_ , rather than just the _level_ of productivity growth, this estimate may still be biased. As information on agricultural inputs is available only at the household level, it was not possible to conduct the more appropriate comparison between changes in net revenue for owned and rented in plots by the same household.

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