Impacts of Parcel-Based Second Level Landholding Certificates on Tenure Security, Investment and Land Productivity: In Tigrai, Northern Ethiopia

The question of whether the rural land registration and certification has an impact on tenure security, investment and land productivity or not, remains an important policy question. It is also a deeply sensitive political issue in present day of Ethiopia. Using household level data collected from 279 households of Raya Azebo district of Tigrai, north Ethiopia this paper investigates the impacts of parcel based second level land holding certificates on tenure security, investment and land productivity. Results of both probit model and IV-probit model consistently indicate that certificate positively and significantly associated with both specification of tenure security. in case of the investment impacts of certificate, The double hurdle model (probit specification for adoption decision and alternative truncated regressions on the actual zeros and predicted zeros from probit regression) and alternative Tobit specification are run. But the likelihood ratio test of model appropriates rejects the Tobit model in favour of the double hurdle model. This encourages the research to separately estimate adoption decision and intensity of adoption. Results from the double hurdle model shows certificate have positively and significantly correlated with decision to invest stone terrace and soil bound but negatively correlated with intensity of investment. While, there is no significant relationship between tree planting and second level land holding certificate but the parametric result confirms that certified households have significant gains from certification in terms of productivity. In sum, a result indicates that certificate has positive and significant benefits on both perceived tenure security investment decision and land productivity.