On the structure of tenancy contracts: theory and evidence from 19th century rural Sicily

Oriana Bandiera

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper analyses the empirical determinants of contract length, a key and yet neglected dimension of contractual structure. I use data on tenancy agreements signed between 1870 and 1880 in the district of Siracusa, Italy to estimate the choice over length and compensation schemes jointly. The findings indicate that the choice of contract length is driven by the need to provide incentives for non-observable investment, taking into account transaction costs and imperfections in the credit markets that make incentive provision costly. The results also illustrate that since both length and the compensation scheme are used to provide incentives within the same contract, joint analysis is important for a correct interpretation of the evidence.

Keywords: contract duration; incentives; tenancy agreements. (search for similar items in EconPapers)
JEL-codes: D82 O12 Q15 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2000-01
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http://eprints.lse.ac.uk/3546/ Open access version. (application/pdf)

Related works:
Working Paper: On the Structure of Tenancy Contracts: Theory and Evidence from 19th Century Rural Sicily (2001)
Working Paper: On the Structure of Tenancy contracts: Theory and Evidence fron 19th Century Rural Sicily (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:3546

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