Measuring the poverty reduction potential of land in rural Mexico

To help inform the current debate on the role of land as an instrument for poverty reduction, we analyze the conditions under which access to land reduces poverty in Mexican rural communities. Semi-parametric regression results show that access to even a small plot of land can raise household welfare significantly. For smallholders, an additional hectare of land increases welfare on average by 1.3 times the earnings of an agricultural worker. In addition, the marginal welfare value of land depends importantly on a household's control over complementary assets such as education and on the context where assets are used such as road access. (c) 2004 Elsevier B.V. All rights reserved.