Land ownership, tenure and subjective well-being in South Africa

Abstract

The dual land tenure system, characteristic of South Africa’s land economy, is comprised of private ownership and communal land ownership presided over by a traditional council. This paper has two main findings in relation to land tenure in South Africa: owning land, compared to not owning land, and owning land privately, compared to owning land communally, has a positive, statistically significant impact on subjective well-being. Using waves 4 and 5 of the National Income Dynamics Study (NIDS) longitudinal dataset, a set of econometric methodologies is employed to quantify the impact of ownership and tenure on self-reported well-being using an ordinary least squares estimation as a point of analytical departure. To account for possible endogeneity stemming from self-selection and unobserved heterogeneity, an instrumental variable, propensity score method and Heckman’s ordered selection probit model is computed. A persistent positive effect of land ownership and private ownership on subjective well-being is found across the various estimation strategies. Further robustness checks are assessed to increase the internal validity of the main methodology; this includes a mixed effects and ordered logit approach that treats subjective well-being as ordinal. The estimated increases in subjective well-being ranges between 0.348 to 0.466 levels for landowners and 0.277 to 0.331 levels for private owners.