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Reverse-Share-Tenancy and Marshallian Inefficiency: Bargaining Power of Landowners and the Sharecropper’s Productivity

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  • Ghebru, Hosaena H.
  • Holden, Stein T.

Abstract

Making use of a unique tenant-landlord matched data from the Tigray region of Ethiopia, we are able to show how strategic response of tenants - to varying economic and tenure security status of the landlords - is important in explaining productivity differentials of sharecroppers. The results show that sharecroppers’ yield are significantly lower on plots leased from landlords who are non-kin; female; with lower income generating opportunity; and tenure insecure households, than on plots leased from landlords with contrasting characteristics. While, on aggregate, the result shows no significant efficiency loss on kin-operated sharecropped plots, a more decomposed analyses indicate strong evidences of Marshallian inefficiency on kin-operated plots leased from landlords with weaker bargaining power and higher tenure insecurity. This study, thus, shows how failure to control for such heterogeneity of landowners' characteristics can explain the lack of clarity in the existing empirical literature on the extent of moral hazard problems in sharecropping contracts.

Suggested Citation

  • Ghebru, Hosaena H. & Holden, Stein T., 2012. "Reverse-Share-Tenancy and Marshallian Inefficiency: Bargaining Power of Landowners and the Sharecropper’s Productivity," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126883, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae12:126883
    DOI: 10.22004/ag.econ.126883
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    Cited by:

    1. Dokken, Therere, 2013. "Land tenure in Tigray: How large is the gender bias?," CLTS Working Papers 5/13, Norwegian University of Life Sciences, Centre for Land Tenure Studies, revised 10 Oct 2019.
    2. Rammelt, Crelis F. & Leung, Maggi W.H., 2017. "Tracing the Causal Loops Through Local Perceptions of Rural Road Impacts in Ethiopia," World Development, Elsevier, vol. 95(C), pages 1-14.
    3. Crelis F. Rammelt & Maarten Van Schie & Fredu Nega Tegabu & Maggi Leung, 2017. "Vaguely Right or Exactly Wrong: Measuring the (Spatial) Distribution of Land Resources, Income and Wealth in Rural Ethiopia," Sustainability, MDPI, vol. 9(6), pages 1-19, June.

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    More about this item

    Keywords

    Crop Production/Industries; International Development; Land Economics/Use;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • 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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