Effects of land titling on household tenure security and investments: Evidence from Nicaragua

Abstract

We analyze the impacts of systematic land tenure rights formalization under the Land Administration Program (PRODEP) in Nicaragua. We use quasi-experimental impact evaluation methods, based on data collected for this purpose, to analyze the impact of titling on tenure security, land value, and household-level investments. Based on these methods which help isolate the effects of the program, we find that titling under PRODEP contributed to an increase of 2.8% in landowners’ perception of tenure security and of up to 39% increase in perceived value of their land. Women that obtained their titles during the second phase of the program were more likely than men, about 9% more, to report an increase in the value of their land. While the outcomes of the program are encouraging, the study did not find conclusive impacts in household investments resulting from titling. Data and knowledge on the program’s targeting suggest that, because of pre-program high levels of tenure security (potentially an anticipation effect) household investments and land transactions were already taking place. Also, data on the program context points to a lack of initiatives, including those supporting local economic development, housing improvements, or livelihoods’ support, which could have boosted the results from PRODEP’s titling.