Livestock and Private Tree Holdings in Rural Ethiopia: The Effects of Collective Action Institutions, Tenure Security and Market Access

Abstract

This article uses househld panel data spanning the period 2000–2007 to test hypotheses from the literature that secure land tenure, market access and collective action promote accumulation of private capital assets in rural highland Ethiopia. The three natural capital assets analysed in the article, livestock, eucalyptus trees and non-eucalyptus trees on households’ farm plots, make up virtually 100 per cent of privately held disposable assets. Incomes and capital stocks are extremely low and constant and tree assets are at least as important as livestock. We find that collective action and secure land tenure have strong positive effects on accumulation of livestock and other trees, but not eucalyptus. We also find evidence that market access promotes eucalyptus holdings and that other types of wealth tend to be positively associated with private natural capital stocks.