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The Effect of Land Use Consolidation (LUC) on Household Wealth Accumulation in Rwanda : Does Urbanisation Matter ?

Economic Policy Research Network – www.eprnrwanda.org

Highlights
* The conditional effect of urbanisation through LUC on household wealth accumulation in Rwanda is analysed.
* The conditional effect of urbanisation through LUC on household wealth accumulation is positive and statistically
significant at a 1% level.
* An Effective Urbanisation policy could help achieve a more significant effect of LUC in improving household wealth accumulation.

Executive Summary
It has been argued that LUC helps to promote the revitalisation of rural industry, ecology, culture and talent. However, little is known about the conditional effect of urbanisation through LUC on household wealth accumulation. In this policy brief, urbanisation is defined as a household’s likelihood of being in an urban area. This policy brief investigates the role of urbanisation in agricultural land reform in stimulating household wealth accumulation. Its results suggest that
implementing the LUC policy, accompanied by an urbanisation policy, substantially shifts households from the poorest, poor, and medium wealth categories to the wealthy and wealthier categories. Notably, an effective urbanisation policy could support LUC in achieving further sustainable household wealth accumulation.