An Economic Analysis of Tenure in East Anglia Using Qualitative Data

For many years, the most commonly used data concerning tenure in England and Wales has dichotomised between two types: tenancy and owner occupation. However, other contract forms have become highly popular and landowners and farmers are faced with more than a simple two‐way choice. This paper focuses on the share farming agreement which has proven to be very popular in East Anglia. Economic models have shown the efficiency of choosing share agreements when some market imperfection exists. In particular, when there are unmarketed inputs into the production process and two agents have a complementary distribution of these inputs, a contract which apportions the profits of farming ‐ such as the share arrangement ‐ would prove efficient given the presence of transactions costs. The endowments of the unmarketed input is often unobservable and agents only have subjective indicators of their distribution in a prospective contractor. The paper explores this qualitative feature of share farming. The research uses results from tape‐recorded interviews to highlight the existence of unmarketed inputs and the importance farmers attach to accurately assessing this variable. The qualitative analysis also provides evidence that contract transactions costs are reduced through reputation building and signalling.