Non‐income effect of land ownership and tenure on subjective wellbeing in South Africa

Abstract

AbstractAside from the very high inequality of land ownership, South Africa is characterised by a dual land tenure system comprising of private ownership and communal land ownership. Using waves 4 and 5 of the National Income Dynamics Study longitudinal data set, a set of econometric methodologies is employed to quantify the impact of ownership and tenure on an index of subjective wellbeing (SWB) constructed from eight self‐reported responses covering general life satisfaction, contrast, social capital, mental health and hope for future. Controlling for the income effect and other pertinent drivers of SWB, the study highlights the non‐income impact of land ownership and tenure on the subjective wellbeing of individuals. To account for possible endogeneity and self‐selection, instrumental variable and matching method‐based treatment effects are computed. This paper has two main findings in relation to land tenure in South Africa: (a) land owners have on average a higher index of SWB compared to those not owning land, and (b) owning land privately, compared to owning land communally, has a positive impact on subjective wellbeing within land owners. These results are consistent and statistically significant across the various estimation strategies and provide additional motivation for expediting land reforms in South Africa.