Contract Duration and the Division of Labor in Agricultural Land Leases

Jonathan K. Yoder, Ishrat Hossain, Francis M. Epplin and Damona Doye ()

No 12962, Working Papers from Washington State University, School of Economic Sciences

Abstract: Short-term contracts provide weak incentives for durable input investment if post-contract asset transfer is difficult. Our model shows that when both agents provide inputs, optimal contract length balances weak incentives of one agent against the other. This perspective broadens the existing contract duration literature, which emphasizes the tradeoff between risk sharing and contract costs. We develop hypotheses and test them based on private grazing contracts from the Southern Great Plains. We find broad support for the implications of our model. For example, landowners provide durable land-specific inputs more often under annual versus multiyear contracts.

Keywords: Labor and Human Capital; Land Economics/Use (search for similar items in EconPapers)
Pages: 39
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://ageconsearch.umn.edu/record/12962/files/wp050006.pdf (application/pdf)

Related works:
Journal Article: Contract duration and the division of labor in agricultural land leases (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:wsuewp:12962

DOI: 10.22004/ag.econ.12962

Access Statistics for this paper

More papers in Working Papers from Washington State University, School of Economic Sciences Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().