Scandinavian Working Papers in Economics

CLTS Working Papers,
Norwegian University of Life Sciences, Centre for Land Tenure Studies

No 2/12: Reverse Share-Tenancy and Marshallian Inefficiency: Bargaining Power of Landowners and the Sharecroppers’ Productivity

Hosaena H. Ghebru () and Stein T. Holden ()
Additional contact information
Hosaena H. Ghebru: International Food Policy Researc Institute (IFPRI), Postal: 2033 K. Street, Washington, DC, 20006, USA
Stein T. Holden: Department of Economics and Resource Management (IØR),Norwegian University of Life Sciences (UMB), Postal: P.O.Box, 5003, N_1432, Aas, Norway

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.

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

JEL-codes: D01; O13; O18; Q12; Q15

45 pages, September 1, 2012

Full text files

CLTS_WP2_2012.pdf PDF-file 

Download statistics

Questions (including download problems) about the papers in this series should be directed to Kateryna Krutskykh ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2018-01-23 23:36:18.