Participation and Contract Choice in the Tenancy Market

Sharmina Ahmed and Christopher Findlay

EERI Research Paper Series from Economics and Econometrics Research Institute (EERI), Brussels

Abstract: Though sharecropping remains widespread, its determinants are still poorly understood and the debate over the extent of risk-sharing and moral hazard is far from settled. Moreover, existing empirical study very often plague by selection problem. We address both issues using data from rural Bangladesh. This paper tested a model empirically where the leasing decision and contract choice are simultaneous. A modified Heckman model is estimated which avoids the selectivity bias of observed contracts. Empirical tests reject the hypothesis of pure risk sharing and a wide range of support for the presence of moral hazard problem in the choice of contracts.

Keywords: Contract choice; Heckman model; Moral hazard; Risk; Sharecropping. (search for similar items in EconPapers)
JEL-codes: Q15 (search for similar items in EconPapers)
Date: 2012-04-04
New Economics Papers: this item is included in nep-cta
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Persistent link: https://EconPapers.repec.org/RePEc:eei:rpaper:eeri_rp_2012_04

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