Money, Land or self-employment? Understanding preference heterogeneity in landowners' choices for compensation under land acquisition in India. (September 2020)

• Record Type: Journal Article
• Authors: Patil, Vikram; Ghosh, Ranjan; Kathuria, Vinish; Farrell, Katharine N.
• Is Part Of: Land use policy. Volume 97(2020)
• Publication Date: 2020-09
• Subjects: Land acquisition -- Rehabilitation and resettlement -- Farmers' decision-making -- Land governance -- Contingent ranking -- India; Land use -- Periodicals; Land use -- Government policy -- Periodicals; Sol, Utilisation du -- Périodiques; Sol, Utilisation du -- Politique gouvernementale -- Périodiques; Electronic journals; 333.7305
• DOI: 10.1016/j.landusepol.2020.104802
• Languages: English
• ISSNs: 0264-8377

Abstract

Highlights: We analyse the factors underlying landowners' preferences for compensation in case of land acquisition. A contingent ranking experiment was conducted with landowners facing imminent displacement. Landowners with more land or education tend to favour monetary compensation. Those with lower education or less land tend to favour housing and self-employment options. Understanding preference heterogeneity critical for making rehabilitation and resettlement policies targeted and effective. Abstract: Land acquisition policies, upon which future land use patterns in India depend, are controversially tied to the question of whether to provide monetary or non-monetary compensation to affected landowners. However, turning to the preferences of landowners for answers only serves to complicate matters, as these are not homogenous on the question. This implies there is a need to identify the underlying factors giving rise to this preference heterogeneity, in order to develop more effective and efficient policy. This paper aims to address this gap using a contingent ranking experiment to study landowner disposition toward a range of compensation options, presented in a survey conducted in an 'about-to-be-submerged' region of a large, multi-stage irrigation project in India. Rankings were based on a selection of six compensation options, constituting different combinations of the attributes - cash, land, housing and self-employment. While the results suggest that landowners generally prefer non-monetary compensation, both the size of landholding and level of education of the landholder appear to influence the preferences for different compensation options. We find that landowners with more land or education tended to favour monetary compensation, while those with lower education or less land tended to favour housing and self-employment options. We close the text by exploring possible explanations for this specific form of heterogeneity, including access to information, to networks and capacities for income generation, and providing some reflections on the implications of these results for ensuring that rehabilitation and resettlement policies are both well targeted and effective.