Land Security in Rural Thailand: Evidence from a Property Rights Reform

In the 1980s, the Thai government legalized squatters living in public land by issuing certificates that allowed self-cultivation but restricted the sale and rental of the land. Using a differences-in-differences empirical strategy, we compare the differential rental rates between titled and untitled plots in reform and non-reform areas. We find that in reform areas households are more likely to lease titled plots and cultivate untitled plots because owners feared that untitled plots would also be expropriated if leased, although the restrictions only applied to plots with reform certificates. Using land rental rates and prices, we estimate that the rental rate of untitled land in reform areas includes a 4 percent premium due to expropriation risk. In other areas, however, land rights do not influence leasing decisions nor does a risk premium exist.

Available for download

Working Paper