IDEAS home Printed from https://ideas.repec.org/p/ags/cudawp/127203.html
   My bibliography  Save this paper

An Asset Risk Theory of Share Tenancy

Author

Listed:
  • Bellemare, Marc F.
  • Barrett, Christopher B.

Abstract

Reverse share tenancy, wherein poorer landlords rent out land to richer tenants on shares, is a common phenomenon. Yet it does not fit existing theoretical models of sharecropping and has never before been modeled in the economics literature. We explain share tenancy contracts using an asset risk model that incorporates Marshallian inefficiency and thereby provides a credible explanation for share tenancy more broadly, reverse tenancy included. When choosing the terms of an agrarian contract, the landlord considers the impact of her choice on the probability that she will retain future rights to the rented land. Thus, this model captures the effect of tenure insecurity and property rights on agrarian contracts. Among the main testable implications of the theoretical model are that, as property rights become more secure, reverse tenancy tends to disappear and that kin contracts tend to make share tenancy more likely.

Suggested Citation

  • Bellemare, Marc F. & Barrett, Christopher B., 2003. "An Asset Risk Theory of Share Tenancy," Working Papers 127203, Cornell University, Department of Applied Economics and Management.
  • Handle: RePEc:ags:cudawp:127203
    DOI: 10.22004/ag.econ.127203
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/127203/files/Cornell_Dyson_wp0313.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Joseph E. Stiglitz, 1974. "Incentives and Risk Sharing in Sharecropping," Review of Economic Studies, Oxford University Press, vol. 41(2), pages 219-255.
    2. Seiichi Fukui, 1997. "The Meaning of Kinship in Sharecropping Contracts," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 394-406.
    3. Smith, Adam, 1776. "An Inquiry into the Nature and Causes of the Wealth of Nations," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number smith1776.
    4. David M. G. Newbery, 1977. "Risk Sharing, Sharecropping and Uncertain Labour Markets," Review of Economic Studies, Oxford University Press, vol. 44(3), pages 585-594.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fenske, James, 2014. "Imachi Nkwu: Trade and the Commons," The Journal of Economic History, Cambridge University Press, vol. 74(1), pages 39-68, March.
    2. Fenske, James, 2014. "Imachi Nkwu: Trade and the Commons," The Journal of Economic History, Cambridge University Press, vol. 74(01), pages 39-68, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yashodha, Y., 2018. "Bargaining and Contract Choice: Evidence from Informal Groundwater Contracts," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 276035, International Association of Agricultural Economists.
    2. Pierre Dubois & Bruno Jullien & Thierry Magnac, 2008. "Formal and Informal Risk Sharing in LDCs: Theory and Empirical Evidence," Econometrica, Econometric Society, vol. 76(4), pages 679-725, July.
    3. Takane, Tsutomu, 2000. "Incentives Embedded in Institutions: The Case of Share Contracts in Ghanaian Cocoa Production," The Developing Economies, Institute of Developing Economies, Japan External Trade Organization(JETRO), vol. 38(3), pages 374-397, September.
    4. Jellal, Mohamed & Zenou, Yves, 2005. "Ethnic Diversity, Market Structure and Risk Sharing in Developing Countries," CEPR Discussion Papers 5366, C.E.P.R. Discussion Papers.
    5. Ananish Chaudhuri & Pushkar Maitra, 1997. "Determinants of Land Tenure Contracts; Theory and Evidence from Rural India," Departmental Working Papers 199710, Rutgers University, Department of Economics.
    6. Conning, Jonathan & Udry, Christopher, 2007. "Rural Financial Markets in Developing Countries," Handbook of Agricultural Economics, in: Robert Evenson & Prabhu Pingali (ed.), Handbook of Agricultural Economics, edition 1, volume 3, chapter 56, pages 2857-2908, Elsevier.
    7. Rambonilaza, Mbolatiana, 2004. "Normes sociales et productivité dans le processus d’appariement des contrats agricoles," L'Actualité Economique, Société Canadienne de Science Economique, vol. 80(4), pages 571-592, Décembre.
    8. Vassalos, Michael & Li, Yingbo, 2016. "Assessing the Impact of Fresh Vegetable Growers’ Risk Aversion Levels and Risk Preferences on the Probability of Adopting Marketing Contracts: A Bayesian Approach," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 19(1), pages 1-18, February.
    9. Nasim, Sanval & Helfand, Steven & Dinar, Ariel, 2020. "Groundwater management under heterogeneous land tenure arrangements," Resource and Energy Economics, Elsevier, vol. 62(C).
    10. Head, Thomas, 1981. "Modeling Institutional Change in Rural Egypt," Working Papers 232846, University of California, Davis, Agricultural Development Systems: Egypt Project.
    11. Sen, Debapriya, 2011. "A theory of sharecropping: The role of price behavior and imperfect competition," Journal of Economic Behavior & Organization, Elsevier, vol. 80(1), pages 181-199.
    12. repec:ags:ucdegw:232846 is not listed on IDEAS
    13. James Roumasset, 2004. "Rural Institutions, Agricultural Development, and Pro-Poor Economic Growth," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 1(1), pages 61-82, June.
    14. Roumasset, J., 1995. "The nature of the agricultural firm," Journal of Economic Behavior & Organization, Elsevier, vol. 26(2), pages 161-177, March.
    15. Ruifeng Liu & Zhifeng Gao & Yefan Nian & Hengyun Ma, 2020. "Does Social Relation or Economic Interest Affect the Choice Behavior of Land Lease Agreement in China? Evidence from the Largest Wheat−Producing Henan Province," Sustainability, MDPI, Open Access Journal, vol. 12(10), pages 1-19, May.
    16. Gebrehiwot, D. & Holden, S.T., 2018. "Variation in output shares and endogenous matching in land rental contracts," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277362, International Association of Agricultural Economists.
    17. Ananish Chaudhuri, 1997. "A Dynamic Model of Contractual Choice in Tenancy," Departmental Working Papers 199711, Rutgers University, Department of Economics.
    18. Debapriya Sen, 2005. "Sharecropping, interlinkage, and price variation," Department of Economics Working Papers 05-10, Stony Brook University, Department of Economics.
    19. Holden, Stein T. & Ali, Daniel & Deininger, Klaus & Hilhorst, Thea, 2016. "A Land Tenure Module for LSMS," CLTS Working Papers 1/16, Norwegian University of Life Sciences, Centre for Land Tenure Studies, revised 16 Oct 2019.
    20. H Peyton Young, 2014. "The Evolution of Social Norms," Economics Series Working Papers 726, University of Oxford, Department of Economics.
    21. Wang, Hui & Riedinger, Jeffrey & Jin, Songqing, 2015. "Land documents, tenure security and land rental development: Panel evidence from China," China Economic Review, Elsevier, vol. 36(C), pages 220-235.

    More about this item

    Keywords

    Risk and Uncertainty;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:cudawp:127203. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search). General contact details of provider: https://edirc.repec.org/data/dacorus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.