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Abstract

This study examines the impact of drought on the land ownership rights of smallholder farmers in Uganda. Three waves of the Uganda National Panel Survey are combined with an indicator for drought, the Standardized Precipitation Evapotranspiration Index. Using a household fixed effects approach, we exploit spatial and temporal variation in drought conditions to identify its effect on households’ self-reported willingness to acquire land ownership rights, both at the extensive and intensive margins. Results show that exposure to drought lowers households’ intentions to purchase land and substantially reduces the price households are willing to pay for land. The effects persist over time and are robust to different specifications. Our findings suggest that drought exposure limits the operating space for farmers wishing to purchase land.