The role of property rights in resource allocation has been one of
the central themes in development economics. There exists extensive
theoretical arguments that property rights in land are closely
associated with the productive efficiency of agricultural resources as
well as investment decisions. However, empirical findings have not
been conclusive. This has been complicated due to possible endogeneity
of titles, unobserved hetrogeneities and the non-experimental
nature of the data. To overcome these problems, the study employs
an instrumental variable and fixed effects models. The inheritance
status of a plot is used as an IV for the titling status of a plot. Using
the 2010/2011 Tanzania National Survey data, it is shown that the
effects of titling on investment is positive and sizable. Formal tests
of endogeneity are presented to establish the claim that titles are
endogenous.