holdings compared to land ownership, different to what is observed in most other countries. The Gini coefficient is 0.40 for land ownership compared to 0.47 for operational holdings. While this is low compared to the high levels of land inequality encountered in Latin America, it is higher than in China where, contrary to Ethiopia, rental markets also equalize the operational land distribution.<sup>14</sup> Finally, while one would expect those renting in to have better access to family labor, the fact that—contrary to what is observed in most other settings where the skilled and relatively wealthy rent out to pursue nonagricultural options—tenants’ human and physical capital endowments are higher than that of landlords points towards barriers to entry into non-farm activities in the Ethiopian context.

# **_B. Plot Level Characteristics_**

Table 2 presents information on output and input as well as source of traction and, for rented ones, the type of transaction partner for the 19,249 relevant plots under cereals, pulses, and oilseeds in the pooled sample. Plots cultivated with vegetables, fruits and other trees are excluded because of the nature of the survey villages all of which are predominantly cereal-producing areas in the highlands, in addition to a number of technical reasons, e.g. significant underreporting of output for continuously harvested fruits and vegetables and non-availability of price information for some tree crops such as eucalyptus.<sup>15</sup> Out of these, slightly more than one third (7,569 plots) belong to owner-cum-sharecroppers who own and lease in land at the same time and who will be of main interest for the household fixed-effect regressions.<sup>16</sup> Comparison of the columns 1-4 and 5-7 corresponding to the whole sample and the sub-sample of owner-cum-sharecroppers, respectively, points towards few significant differences, suggesting that the latter are broadly representative of the overall population. With less than 10% of rented plots transferred on fixed rent, sharecropping is the predominant contractual arrangement. As per panel 1, most transfers were limited to close kin: 60% of plots were exchanged between relatives or in-laws, 30% among neighbors or VA members,<sup>17</sup> and only 10% between unrelated individuals. With 21%, the share of plots transacted in rental markets is lower than that of households involved in rental transactions as rental transactions normally involve only part of a household’s endowment. Also the share of output accruing to landlords, close to 50%, is high. Although detailed data was not collected on the nature and formality of contracts, the mean leased-in plot in the sample had been in the possession of the current tenant for about 4 years, consistent with mean contract duration of 3 years based on the 3<sup>rd</sup> round data.

> 14 The Gini coefficient for the ownership distribution of land is 0.92 for Venezuela and 0.87 for Brazil (Deininger and Squire 1998) compared to a Gini of 0.36 for the distribution of use rights, which was further reduced through transfers, in three provinces of China (Deininger and Jin 2005). 15 A total of 3966 plots in the pooled sample from the analysis (112 of them under sharecropping and a total of 993 operated by owner-cumsharecroppers planted to vegetables, fruits or tree crops are dropped due to the difficulty of computing output values. 16 As plots transferred under fixed rent are not included in our plot-level analysis, and in view of their small number, we do not separately report descriptive statistics for them.

> 17 Village associations (VAs) are self-help groups and informal networks such as agricultural mutual aid groups, rotating savings and credit associations, rotating feast groups, burial associations, etc. that are formed among persons of common kin, neighborhood or faith.

12