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The Efficiency of Sharecropping: Evidence from the Postbellum South

  • Martin A. Garrett Jr.

    ()

    (Department of Economics, The College of William and Mary)

  • Zhenhui Xu

    ()

    (School of Business, Georgia College & State University)

In this article, we investigate why sharecropping rose sharply in the postbellum South. Our hypothesis is that sharecropping was desirable because sharecropped farms could be more productive than owner-operated farms and perhaps more productive than rented farms. Using the data from the postbellum South, we find strong empirical support for this hypothesis. Our results show that the output elasticity of sharecropped farms is higher than that of owner-operated farms on all occasions and that of rented farms on some occasions. The differences in productivity are statistically significant, and the results are very robust. These empirical results refute the long-held notion that sharecropping is inefficient. Contrary to the view that, like a tax, sharecropping produces disincentives to work, the results in this article suggest that sharecropping might have created an incentive among farmers for its rapid and widespread use in the postbellum South.

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Article provided by Southern Economic Association in its journal Southern Economic Journal.

Volume (Year): 69 (2003)
Issue (Month): 3 (January)
Pages: 578-595

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Handle: RePEc:sej:ancoec:v:69:3:y:2003:p:578-595
Contact details of provider: Web page: http://www.southerneconomic.org/
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