Institution and development: experimental evidence of land titling on welfare gains in India

Increasing evidence shows the significance of de jure land ownership in determining agricultural productivity. Yet, causal evidence of the effectiveness of land rights is scarce. We leverage experimental variation induced by nudging Indian farmers to obtain formal land titles. We find that titling increases agricultural investments, productivity, and profits. We identify the collateral effect of titling as the potential channel for higher investment. Farmers respond to titling by releasing locked-in family labour, but land formalization fails to stimulate land markets. We show that those who obtain land titles make welfare gains and subsequently recover the full cost of titling