Testing between Competing Models of Sharecropping

Abstract

The "Marshallian" approach assumes a prohibitively high cost of monitoring the sharecropper's activities while the "monitoring" approach argues that landlords stipulate and effectively monitor sharecroppers' activities. I present new evidence using detailed data collected from eight Indian villages. Most tenants own some land of their own; this provides a controlled environment in studying the impact of contractual arrangements. The differences in input and output intensities on owned minus sharecropped land of the same household are found to be sizable and significant, suggesting a rejection of the monitoring approach and supporting the notion of the "Marshallian productive inefficiency" of sharecropping.

ACHIEVING SOCIAL OBJECTIVES THROUGH PRIVATE TRANSFERS: A Review

“…The best way of controlling for other factors affecting farming technique and performance, such as access to credit, willingness to bear risk, and farming and husbandry skills, is to compare input intensities and yields on owned and leased plots farmed by the same individual. Among such studies, Bell (1977) for Bihar, Hossain (1977) for Bangladesh, and Shaban (1987) for the Deccan plateau found significant differences, whereas Chakravarty and Rudra (1973) found none in the case of West Bengal. Another survey of rnore recent studies of Asian economies (Otsuka and Hayami 1988) also reveals rather mixed findings.…”

Incomplete Contracts And Investment : A Study Of Land Tenancy In Pakistan

“…To get estimates comparable to those in row (1) -i.e., marginal effects -we multiply the fixed effect tobit coefficients and standard errors by one minus the observed censoring rate. 24 The results in row (2) of Table 3 show that ignoring corner solutions leads us to understate the evidence against the null, but not by very much; the t-statistic on the leasing coefficient rises from 5.78 in row (1) to 6.48 in row (2).…”

“…The OLS estimate of α from this regression is consistent provided that EL ci ∆ε c = 0. As long as the set of observed plot characteristics X ci is sufficiently rich, this identifying assumption (maintained by Shaban, 1987, among others) is reasonable. However, plot fertility is not easy to assess in survey data.…”

“…5 This is not the first paper to compare farming practices on tenanted and owned land, but it is the first paper of its type to study investment behavior. Seminal work by Bell (1977), followed by Shaban (1987), is concerned with static efficiency; i.e., with moral hazard in current production effort that can arise in share-tenancy. Our approach, by 1 The notion of contractual 'incompleteness' is still viewed as somewhat ad hoc (see Tirole, 1999;Hart and Moore, 1999).…”

Institutional constraints on organizations: the case of Spanish car dealerships

“…In franchising, the relation between organizational form and performance has been studied by Shelton (1967), who finds that, under company ownership, costs of outlets are higher and profits are lower than under franchising in a single chain; Krueger (1991), who finds that employees of company-owned outlets are paid slightly more than employees in franchised units; Beheler (1991), who finds that directly-owned restaurants provide lower quality service than franchised ones of the same chain; and Barron and Umbeck (1994), who, on the contrary, find that franchised gas stations are opened less hours. There is also a substantial body of empirical evidence on agriculture, comparing the yields obtained under sharecropping with those under lease contracts (Nabi, 1986) and ownership (Shaban, 1987).…”