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Tenants, Landlords, and Soil Conservation

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  • Erik Lichtenberg

Abstract

It has long been argued that tenants tend to overexploit land, but this conventional wisdom has been derived largely without consideration of landlords' actions. We examine what happens when landlords can invest in durable conservation measures in addition to choosing rental contract terms. When tenants are risk neutral, landlords overinvest in conservation under cash rental contracts but can achieve first best levels of output and protection against land degradation when conservation investment is combined with share rental. When tenants are risk averse, the first best is unattainable. In this case, conservation investment combined with share rental results in output levels below the first best, while equilibrium conservation investment may be greater or less than the first best. These results suggest that contract form and conservation investments are likely made simultaneously, so that econometric studies of conservation practice adoption that treat rental status as exogenous are likely subject to bias. Copyright 2007, Oxford University Press.

Suggested Citation

  • Erik Lichtenberg, 2007. "Tenants, Landlords, and Soil Conservation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(2), pages 294-307.
    • Handle: RePEc:oup:ajagec:v:89:y:2007:i:2:p:294-307
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    File URL: http://hdl.handle.net/10.1111/j.1467-8276.2007.00990.x
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    Cited by:

    1. Pouta, Eija & Myyra, Sami & Hanninen, Harri, 2009. "Heterogeneous farmland owners: two approaches for objective based classification," 2009 Conference, August 16-22, 2009, Beijing, China 50787, International Association of Agricultural Economists.
    2. B. James Deaton & Chad Lawley & Karthik Nadella, 2018. "Renters, landlords, and farmland stewardship," Agricultural Economics, International Association of Agricultural Economists, vol. 49(4), pages 521-531, July.
    3. Awudu Abdulai & Renan Goetz, 2014. "Time-Related Characteristics of Tenancy Contracts and Investment in Soil Conservation Practices," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 59(1), pages 87-109, September.
    4. Wang, Tong & Luri, Moses & Janssen, Larry & Hennessy, David A. & Feng, Hongli & Wimberly, Michael C. & Arora, Gaurav, 2017. "Determinants of Motives for Land Use Decisions at the Margins of the Corn Belt," Ecological Economics, Elsevier, vol. 134(C), pages 227-237.
    5. Katrin Daedlow & Nahleen Lemke & Katharina Helming, 2018. "Arable Land Tenancy and Soil Quality in Germany: Contesting Theory with Empirics," Sustainability, MDPI, vol. 10(8), pages 1-15, August.
    6. Foudi, Sébastien, 2012. "The role of farmers' property rights in soil ecosystem services conservation," Ecological Economics, Elsevier, vol. 83(C), pages 90-96.
    7. Wang, Tong & Luri, Moses & Janssen, Larry & Hennessy, David & Feng, Hongli & Wimberly, Michael & Arora, Gaurav, 2016. "Farmers’ Rankings of the Determinants of Land Use Decisions at the Margins of the Corn Belt," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235109, Agricultural and Applied Economics Association.
    8. Kim, Youngho, 2023. "Payments for Ecosystem Services Programs and Climate Change Adaptation in Agriculture," 2023 Annual Meeting, July 23-25, Washington D.C. 335971, Agricultural and Applied Economics Association.
    9. Goetz, Renan & Yatsenko, Yuri & Hritonenko, Natali & Xabadia, Angels & Abdulai, Awudu, 2019. "The dynamics of productive assets, contract duration and holdup," Mathematical Social Sciences, Elsevier, vol. 97(C), pages 24-37.

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