Evidence on the Incentive Properties of Share Contracts

Braido, Luís Henrique Bertolino

doi:10.1086/589663

Cited by 17 publications

(10 citation statements)

References 18 publications

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“…Some empirical studies have found sharecropping to be efficient when the social distance between respective parties is low. This includes contracts that are made among kin (Sadoulet et al, 1997), contracts of patron–client relations 3 (Bardhan and Rudra, 1980; Hayami and Kikuchi, 1990), or when observed and unobserved plot characteristics are taken properly into account (Braido, 2004). Empirical studies that found sharecropping to be inefficient are usually when policy limits contract choice in some way (Otsuka, 2002).…”

Section: The Discourse On Sharecropping Efficiencymentioning

confidence: 99%

Sharecropping efficiency in Ethiopia: threats of eviction and kinship

Kassie¹,

Holden²

2007

Agricultural Economics

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We tested a theoretical model with the Marshallian inefficiency (H1) and threat of eviction (H2) hypotheses having opposite effects on land productivity on sharecropped plots. The model also assumes that kinship contracts may eliminate or reduce the Marshallian inefficiency (H3) and threat of eviction (H4) effects on land productivity. Our empirical findings were consistent with H2 and H4 being true. We found higher land productivity on sharecropped plots than on share tenants' own plots and higher land productivity on sharecropped plots of nonkin than of kin tenants. The nature of the data allowed controlling for unobservable household characteristics through household fixed effects and for observable plot characteristics. Analyses with and without plot characteristics revealed that these findings were stronger with plot characteristics than without them. Based on the plausible assumption that observable plot characteristics are positively correlated with unobservable plot characteristics this strengthens our conclusion. The results are also supported by first-order stochastic dominance analysis. Sharecropped plots' output value distribution unambiguously dominated the output value distribution from share tenants' own plots. Nonkin sharecropped plots' output value distribution also first-order stochastically dominated the output value distribution from kin sharecrop plots. Copyright 2007 International Association of Agricultural Economists.

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Section: The Discourse On Sharecropping Efficiencymentioning

confidence: 99%

Sharecropping efficiency in Ethiopia: threats of eviction and kinship

Kassie¹,

Holden²

2007

Agricultural Economics

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“…Marshall (1920) considers share tenancy as an inefficient practice of cultivation where resources are suboptimally utilized. The argument behind the inefficiency of sharecroppers is that the farmers are not interested in utilizing their effort optimally because a large portion of output goes to the landlord (Tesafa and Abera, 2014;Braido, 2008). In contrast to the Marshallian inefficiency argument, Johnson (1950) advocates that the tenant may induce to apply the efficient level of input if there is continuous monitoring of the landowners regarding the cultivation practice.…”

Section: Introductionmentioning

confidence: 99%

“…Banerjee et al (2002) found that relatively more land rights that lead to improved crop shares and higher security of tenure for tenants may have a positive effect on productivity. Several studies (Braido, 2008;Dubois, 2002) found that the land leased out to the tenant might be of less fertile than that is cultivated by owner farmers, and thus, sharecropping is relatively inefficient. Goswami (2015) found that the sharecroppers do not consider the productivity enhancing strategy and they are reluctant to use the sufficient amount of input in agricultural production.…”

Section: Introductionmentioning

confidence: 99%

Impact of sharecropping on rice productivity in some areas of Khulna district

Ahmed

Billah

2018

Bangladesh J. Agric. Res

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The study reveals the effect of sharecropping on rice productivity in some selected areas of Khulna District in the South-West region of Bangladesh. Access to land for the landless farmer is governed by informal land tenure arrangement, which in turn affects the productivity of the rice farm. In exploring the debate on sharecropping and farm efficiency, the present study has been conducted to assess the effect of sharecropping on rice productivity. During June 2014, a field survey was conducted by using a semi-structured questionnaire in two villages of Khulna District where sharecropping is one of the dominant land tenure arrangements in rice farming. A Cobb-Douglas production function estimation showed that type of land ownership, use of fertilizers, human labor, and modern variety (MV) including hybrid seed and high yielding varieties (HYVs) of seed had the positive and significant influence on rice production. There was a significant mean difference between the sharecroppers and the owner farmers regarding their volume of rice production. The production volume of the owner farmers was significantly higher by around 781 kg ha-1. The study result from the production function revealed that on an average owner farmers’ output was significantly higher by 10% than that of the sharecroppers. The study also observed that higher land rent in form of a fixed amount of cash or a higher crop share demotivated the sharecroppers to supply the optimum level of input and to use the land intensively. The result implied that the sharecroppers are inefficient compared to the landowners. Therefore, it is recommended that sharing an equitable production cost and a justifiable crop sharing structure might be the better options to motivate the sharecropper to become more efficient concerning their volume of production.Bangladesh J. Agril. Res. 43(3): 417-430, September 2018

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“…Braido (2008) empirically finds a strong inverse relation between tenancy and land quality, but he does not provide theoretical explanations for it.…”

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confidence: 92%

Optimal Tenurial Contracts Under Both Moral Hazard and Adverse Selection

At¹,

Thomas²

2018

American J Agri Economics

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This paper determines the optimal tenurial contract between a monopoly landlord and a tenant protected by limited liability under both adverse selection (based on the tenant's ability) and moral hazard (based on the tenant's choice of effort). We identify different optimal contracts depending on the tenant's outside option. For intermediate values, there is a threshold of tenant ability depending on the outside option level below which the optimal contract is a separating sharecropping contract, and a pooling one otherwise. We also find that an increase in the outside option does not monotonically increase the tenant's optimal effort.

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Evidence on the Incentive Properties of Share Contracts

Cited by 17 publications

References 18 publications

Sharecropping efficiency in Ethiopia: threats of eviction and kinship

Sharecropping efficiency in Ethiopia: threats of eviction and kinship

Impact of sharecropping on rice productivity in some areas of Khulna district

Optimal Tenurial Contracts Under Both Moral Hazard and Adverse Selection

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