Village Fairness Norms and Land-Rental Markets

Abstract

This paper documents the role of village fairness norms in land markets. A strong and robust relationship is established between experimentally elicited village-level fairness norms and land-rental rates across 250 Malawian villages. Stronger fairness norms correlate with a tighter range in village rental rates. The study suggests that the fairness norms for tenants appear to be more important, constraining the land-rental price range by a price ceiling rather than a price floor. The results further indicate that rented-in fields are of lower agronomic quality than owner-cultivated fields, but do not find any statistically significant relationship between the fairness norms and land-rental activity in the village.