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Land Acquisition for Industrialization and Compensation of Displaced Farmers

Author

Listed:
  • Dilip Mookherjee

    (Department of Economics, Boston University)

  • Maitreesh Ghatak

    (London School of Economics, and BREAD)

Abstract
This paper addresses the question of how farmers displaced by acquisition of agricultural land for the purpose of industrialization ought to be compensated. Prior to acquisition, the farmers are leasing in land from a landlord, either a private owner or a local government. There are three sets of relevant incentive e ects in the model: the decision of the landlord to sell the land ex post to an industrial developer, and ex ante incentives of tenants and landlord to make speci c investments in agricultural quality of the land. Our main result is that under a broad class of circumstances, eciency considerations require farmers be over-compensated for their loss of agricultural income in the event of conversion.

Suggested Citation

  • Dilip Mookherjee & Maitreesh Ghatak, 2010. "Land Acquisition for Industrialization and Compensation of Displaced Farmers," Boston University - Department of Economics - Working Papers Series WP2010-039, Boston University - Department of Economics.
    • Handle: RePEc:bos:wpaper:wp2010-039
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations

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