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

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Listed:
  • Ghebru, Hosaena H.

    () (International Food Policy Researc Institute (IFPRI))

  • Holden, Stein T.

    () (Department of Economics and Resource Management (IØR),Norwegian University of Life Sciences (UMB))

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 Sharecroppers’ Productivity," CLTS Working Papers 2/12, Norwegian University of Life Sciences, Centre for Land Tenure Studies.
  • Handle: RePEc:hhs:nlsclt:2012_002
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    References listed on IDEAS

    as
    1. Shaban, Radwan Ali, 1987. "Testing between Competing Models of Sharecropping," Journal of Political Economy, University of Chicago Press, vol. 95(5), pages 893-920, October.
    2. Gavian, Sarah & Ehui, Simeon K., 1999. "Measuring the production efficiency of alternative land tenure contracts in a mixed crop-livestock system in Ethiopia," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 20(1), January.
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    5. Stein Holden & Bekele Shiferaw & John Pender, 2001. "Market Imperfections and Land Productivity in the Ethiopian Highlands," Journal of Agricultural Economics, Wiley Blackwell, vol. 52(3), pages 53-70.
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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.
    2. repec:eee:wdevel:v:95:y:2017:i:c:p:1-14 is not listed on IDEAS

    More about this item

    Keywords

    Marshallian inefficiency; kinship; matching; Reverse-Share-Tenancy; Ethiopia;

    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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