When the Apartheid-regime fell in 1994, 87% of farmland in South Africa was owned by white farmers. The newly elected government led by President Mandela emphasized the need for a rural reform targeting the poor. The main targets in the initial phase of the reform were poverty alleviation, stimulation of economic growth and redistribution of land.
The thesis analyses the impact of the Land Redistribution for Agricultural Development-program (LRAD) in South Africa on monthly consumption expenditure per capita. The cross-section data set from the Quality of Life 2005 land reform beneficiary survey in South Africa provided by the Norwegian Institute for Urban- and Regional Research and Henrik Wiig will be used for an impact assessment analysis.
Keswell et al. (2009) provided an analysis of the average impact of the LRAD program on consumption. The authors concluded that the impact on monthly per capita consumption expenditure is positive and robust when controlling for selection bias. Following the approach used by Keswell et al. (2009), the average impact of the LRAD program on consumption is analyzed. The analysis is extended to tests of whether results are consistent in all provinces and when comparing the households of male and female household heads. Whether the LRAD program has had a positive impact on consumption expenditure per capita is the main hypothesis of the thesis.
The analysis shows a positive effect of the LRAD program on monthly consumption expenditure. The average impacts found are of lesser magnitude compared to the average treatment effects found by Keswell et al. (2009), likely due to weaker ability to reduce selection bias. In the extended analysis, tests reveal that households of male household heads on average are likely to have a positive effect on consumption from obtaining land through LRAD. The effect on female-headed households is ambiguous. Large differences are found on the provincial level. Beneficiaries in KwaZul-Natal and Gauteng exhibit large average increases in consumption, while large negative impacts are found in Eastern Cape and Mpumalanga.