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Livestock and land share contracts in a Hindu society

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  • Jeetendra P. Aryal
  • Stein T. Holden

Abstract

This paper examines factors related to the existence of a livestock rental market in western Nepal and assesses whether this is associated with caste differentiation and land rental market participation. This study brings new empirical evidence of livestock rental market against the established view that such market does not exist due to moral hazard. Theoretical models for asset- rich (high-caste) households, rich in land and livestock, and asset-poor (low-caste) households are presented providing logical explanations for the existence of a livestock rental market and synergies between livestock and land rental market participation. A combination of double hurdle models and bivariate ordered probit models were applied to test the implications of the models. The empirical evidence was found to be consistent with the theoretical models. Land- and livestock-rich (high-caste) households were more likely to rent out land and/or livestock. Land- and livestock-poor and credit constrained (low-caste) households were more likely to rent in livestock and land. Participation in the two markets was positively correlated indicating synergies that may be due to production and transaction cost reducing benefits. The male labor endowment, partly determined by migration, was a major determinant of livestock rental behavior.

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File URL: http://hdl.handle.net/10.1111/j.1574-0862.2012.00605.x
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Bibliographic Info

Article provided by International Association of Agricultural Economists in its journal Agricultural Economics.

Volume (Year): 43 (2012)
Issue (Month): 5 (09)
Pages: 593-606

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Handle: RePEc:bla:agecon:v:43:y:2012:i:5:p:593-606

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References

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  1. Menale Kassie & Stein Holden, 2007. "Sharecropping efficiency in Ethiopia: threats of eviction and kinship," Agricultural Economics, International Association of Agricultural Economists, vol. 37(2-3), pages 179-188, 09.
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  3. Ito, Takahiro, 2009. "Caste discrimination and transaction costs in the labor market: Evidence from rural North India," Journal of Development Economics, Elsevier, vol. 88(2), pages 292-300, March.
  4. Hatlebakk, Magnus & Iversen, Vegard & Torsvik, Gaute, 2011. "Caste, local networks and lucrative jobs: Evidence from rural Nepal," Working Papers in Economics 01/11, University of Bergen, Department of Economics.
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  8. Banerjee, Biswajit & Knight, J. B., 1985. "Caste discrimination in the Indian urban labour market," Journal of Development Economics, Elsevier, vol. 17(3), pages 277-307, April.
  9. Ayalneh Bogale & Benedikt Korf, 2007. "To share or not to share? (non-)violence, scarcity and resource access in Somali Region, Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 43(4), pages 743-765.
  10. Jonathan Morduch, 1995. "Income Smoothing and Consumption Smoothing," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 103-114, Summer.
  11. Holden, Stein & Shiferaw, Bekele, 2004. "Land degradation, drought and food security in a less-favoured area in the Ethiopian highlands: a bio-economic model with market imperfections," Agricultural Economics, Blackwell, vol. 30(1), pages 31-49, January.
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Cited by:
  1. Hagos, Hosaena Gebru & Holden, Stein T., 2013. "Reverse-share-tenancy and Marshallian Inefficiency: Landowners’ bargaining power and sharecroppers’ productivity," IFPRI discussion papers 1270, International Food Policy Research Institute (IFPRI).
  2. Aryal, Jeetendra P. & Holden, Stein T., 2011. "Caste, Land and Labor Market Imperfections, and Land Productivity in Rural Nepal," CLTS Working Papers 6/11, Centre for Land Tenure Studies, Norwegian University of Life Sciences.

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