Endogeneity of land titling and farm investments: Evidence from the Peruvian Andes

摘要: In this study we estimate the effects of land titling on terrace investments in a region of northern Peru, taking into account the possible endogeneity of both titling and terrace decisions. Evidence shows that financial institutions did not provide credit for terrace construction, and that land transactions were limited, implying that the collateral and gains-from-trade effects of land titling would not operate in this case. Conflicts over ownership, however, were common indicating expropriation was a real concern. Singleequation models imply a strong positive effect of titling on adoption of terraces, and vice versa. However, simultaneous equations estimates show that the effects of titling on terrace adoption, and of terrace adoption on titling, are almost an order of magnitude smaller than the values indicated by single equation models. Thus, our results are consistent with the hypothesis advanced in the literature that the …