Participation and Contract Choice in the Tenancy Market
AbstractThough sharecropping remains widespread, its determinants are still poorly understood and the debate over the extent of risk-sharing and moral hazard is far from settled. Moreover, existing empirical study very often plague by selection problem. We address both issues using data from rural Bangladesh. This paper tested a model empirically where the leasing decision and contract choice are simultaneous. A modified Heckman model is estimated which avoids the selectivity bias of observed contracts. Empirical tests reject the hypothesis of pure risk sharing and a wide range of support for the presence of moral hazard problem in the choice of contracts.
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Bibliographic InfoPaper provided by Economics and Econometrics Research Institute (EERI), Brussels in its series EERI Research Paper Series with number EERI_RP_2012_04.
Date of creation: 04 Apr 2012
Date of revision:
Contract choice; Heckman model; Moral hazard; Risk; Sharecropping.;
Find related papers by JEL classification:
- Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
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