In this paper, we analyze supervision activities reported in a cross-section survey of rice farmers in the Bicol region of the Philippines. This survey is unique because it provides supervision data at the farm task level. We present a simple optimization model in which supervision intensity increases the productivity of hired workers, which is assumed to be lower than that of family members due to the transaction costs. The model predicts that supervision intensity will increase with transaction costs. We use different institutional conditions to proxy for transaction costs, and estimate the demand for supervision time for four different classes of rice production tasks. The estimation strategy controls for selectivity in both hiring and supervising. The results show a positive effect of transaction costs on supervision intensity.
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Paper provided by Yale - Economic Growth Center in its series Papers with number
814.
Find related papers by JEL classification: O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
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