Investments in Land Conservation in the Ethiopian Highlands: A Household Plot-level Analysis of the Roles of Poverty, Tenure Security, and Market Incentives

Abstract

Land degradation is a major problem undermining land productivity in the highlands of Ethiopia. This paper analyses the decisions made by an individual household to adopt and intensify land conservation investment. The paper used a Box-Cox Double Hurdle specification and offers the advantage of exploiting panel data collected in a household survey of 6,408 plots in Ethiopia. The results suggest that adoption and intensification decisions appear to be explained by different processes, justifying the use of Box-Cox double hurdle approach over more restrictive models. Poverty-related factors seem to have a mixed effect on both adoption and intensification decisions. While farmer's adoption decision is affected by the expectation of the certainty of cultivating the land for the next five years (risk for long term), intensification of land conservation investment is determined by whether or not the plot is owner-operated (risk for the immediate period) and plot-home distance. A lesson for policymakers is that major changes in land conservation investments will require attention to many factors because no single factor can be used as a major policy leverage instrument. Some of these factors (such as land tenure security, plot size, and total farm holdings) can be directly influenced by government policies and programs.