Usufructuary Mortgages as a Source of Funds in Need: Some Theory and an Empirical Investigation

Clive Bell and Magnus Hatlebakk ()

No 631, Working Papers from University of Heidelberg, Department of Economics

Abstract: The usufruct mortgage has received little attention from economists. This paper develops and analyzes a theoretical framework in which the borrower, who mortgages out, and the lender, who mortgages in, a parcel of land reach their decisions in a risky environment when credit and land markets function imperfectly. It yields some results concerning what conditions and factors govern the decision to contract in the first place and, subsequently, when and whether to repay or agree to a sale. These findings underpin and structure an empirical investigation of such contracting in upland Orissa, based on a panel survey of 279 households over the period 2000-2013. Almost 20 percent had contracts in 2013, the borrowers’ chief need being to marry off a daughter, followed by coping with serious illness and bad harvests. The sums involved were quite large, indicating that such contracts expand households’ opportunities beyond those offered by standard informal and formal credit transactions. Mortgage contracting also appears frequently to lead to the full transfer of ownership rights from relatively land-rich to land-poor households.

Keywords: usufructuary mortgage; agrarian contracts; Orissa (search for similar items in EconPapers)
Date: 2017-05-02
New Economics Papers: this item is included in nep-ure
Note: This paper is part of http://archiv.ub.uni-heidelberg.de/volltextserver/view/schriftenreihen/sr-3.html
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://nbn-resolving.de/urn/resolver.pl?urn=urn:nbn:de:bsz:16-heidok-229063 Frontdoor page on HeiDOK (text/html)
http://archiv.ub.uni-heidelberg.de/volltextserver/ ... ebakk_2017_dp631.pdf (application/pdf)

Related works:
Working Paper: Usufructuary Mortgages as a Source of Funds in Need: Some Theory and an Empirical Investigation (2017)
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:awi:wpaper:0631

Access Statistics for this paper

More papers in Working Papers from University of Heidelberg, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Gabi Rauscher ( this e-mail address is bad, please contact ).