IDEAS home Printed from https://ideas.repec.org/a/bpj/maneco/v5y2018i1p12n1.html
   My bibliography  Save this article

Do Heterogeneous Agricultural Factors Affect Farmland Contractual Choice?—Evidence from China

Author

Listed:
  • He Yiming

    (National School of Agricultural Institution & Development, South China Agricultural University, Guangzhou, Guangdong510642, China)

  • Luo Biliang

    (National School of Agricultural Institution & Development, South China Agricultural University, Guangzhou, Guangdong510642, China)

  • Zou Baoling

    (College of Economics & Management, South China Agricultural University, Guangzhou, Guangdong 510642, China.)

Abstract

This paper introduces a game framework for farmland rent contract choice which incorporates the characteristic uncertainty about the quality of agricultural factors and heterogeneous agricultural attributes matching with rural land leasing contract and the dynamic contracting behavioral equilibrium. The game theoretic model shows that the farmland rent sharecropping is a Pareto optimum contract, that the different farmland use contractual arrangement will match with specific agricultural factors combination between farmland and labor, that sequential rational tenants will make the game transfer from Nash Equilibrium to Perfect Bayesian Equilibrium. Our field survey data of China between 2014 and 2015 is consistent with our theoretic hypothesis. The empirical results indicate that the tenant's age has significant negative effect on share contract, that social security, soil fertility and the number of plots have significant positive effect.

Suggested Citation

  • He Yiming & Luo Biliang & Zou Baoling, 2018. "Do Heterogeneous Agricultural Factors Affect Farmland Contractual Choice?—Evidence from China," Man and the Economy, De Gruyter, vol. 5(1), pages 1-12, June.
    • Handle: RePEc:bpj:maneco:v:5:y:2018:i:1:p:12:n:1
    DOI: 10.1515/me-2017-0006
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/me-2017-0006
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/me-2017-0006?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Zhang, Yuzhe, 2013. "Characterization of a risk sharing contract with one-sided commitment," Journal of Economic Dynamics and Control, Elsevier, vol. 37(4), pages 794-809.
    2. Carter, Michael R, 1987. "Risk Sharing and Incentives in the Decollectivization of Agriculture," Oxford Economic Papers, Oxford University Press, vol. 39(3), pages 577-595, September.
    3. Muriel Niederle, 2007. "Competitive Wages in a Match with Ordered Contracts," American Economic Review, American Economic Association, vol. 97(5), pages 1957-1969, December.
    4. Braverman, Avishay & Srinivasan, T. N., 1981. "Credit and sharecropping in agrarian societies," Journal of Development Economics, Elsevier, vol. 9(3), pages 289-312, December.
    5. Scandizzo, Pasquale L. & Ventura, Marco, 2010. "Sharing risk through concession contracts," European Journal of Operational Research, Elsevier, vol. 207(1), pages 363-370, November.
    6. Westkamp, Alexander, 2010. "Market Structure and Matching with Contracts," Bonn Econ Discussion Papers 02/2010, University of Bonn, Bonn Graduate School of Economics (BGSE).
    7. Cordero Salas, Paula, 2016. "Relational Contracts and Product Quality: The Effect of Bargaining Power on Efficiency and Distribution," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 41(3), pages 1-19.
    8. Ricome, Aymeric & Chaib, Karim & Ridier, Aude & Kephaliacos, Charilaos & Carpy-Goulard, Francoise, 2016. "The Role of Marketing Contracts in the Adoption of Low-Input Production Practices in the Presence of Income Supports: An Application in Southwestern France," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 41(3), pages 1-29.
    9. Yiming He & Shaohui Gao, 2017. "Coasian Theorem, Public Domain, and Property Rights Protection," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 7(5), pages 470-485, May.
    10. Hatfield, John William & Kojima, Fuhito, 2010. "Substitutes and stability for matching with contracts," Journal of Economic Theory, Elsevier, vol. 145(5), pages 1704-1723, September.
    11. Braverman, Avishay & Stiglitz, Joseph E, 1982. "Sharecropping and the Interlinking of Agrarian Markets," American Economic Review, American Economic Association, vol. 72(4), pages 695-715, September.
    12. Kominers, Scott Duke, 2012. "On the correspondence of contracts to salaries in (many-to-many) matching," Games and Economic Behavior, Elsevier, vol. 75(2), pages 984-989.
    13. Allen, Douglas W & Lueck, Dean, 1995. "Risk Preferences and the Economics of Contracts," American Economic Review, American Economic Association, vol. 85(2), pages 447-451, May.
    14. Quibria, M. G. & Rashid, Salim, 1984. "The puzzle of sharecropping: A survey of theories," World Development, Elsevier, vol. 12(2), pages 103-114, February.
    15. Pepa Risma, Eliana, 2015. "Binary operations and lattice structure for a model of matching with contracts," Mathematical Social Sciences, Elsevier, vol. 73(C), pages 6-12.
    16. Buzacott, John A. & Steve Peng, H., 2012. "Contract design for risk sharing partnerships in manufacturing," European Journal of Operational Research, Elsevier, vol. 218(3), pages 656-666.
    17. Yiming He & Shaohui Gao, 2017. "Coasian Theorem, Public Domain, and Property Rights Protection," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 7(5), pages 470-485.
    18. Yang, He, 2014. "The impact of intensive farming on land tenure: Evidence from Confucius' manors (1759–1901)," China Economic Review, Elsevier, vol. 30(C), pages 279-289.
    19. Abdulai, Awudu & Owusu, Victor & Goetz, Renan, 2011. "Land tenure differences and investment in land improvement measures: Theoretical and empirical analyses," Journal of Development Economics, Elsevier, vol. 96(1), pages 66-78, September.
    20. Westkamp, Alexander, 2010. "Market structure and matching with contracts," Journal of Economic Theory, Elsevier, vol. 145(5), pages 1724-1738, September.
    21. Allen, Douglas W. & Lueck, Dean, 1999. "Searching For Ratchet Effects In Agricultural Contracts," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(2), pages 1-17, December.
    22. Allen, Douglas & Lueck, Dean, 1992. "Contract Choice in Modern Agriculture: Cash Rent versus Cropshare," Journal of Law and Economics, University of Chicago Press, vol. 35(2), pages 397-426, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tayfun Sönmez & Tobias B. Switzer, 2013. "Matching With (Branch‐of‐Choice) Contracts at the United States Military Academy," Econometrica, Econometric Society, vol. 81(2), pages 451-488, March.
    2. Huffman, Wallace E & Just, Richard E, 2004. "Implications of Agency Theory for Optimal Land Tenure Contracts," Economic Development and Cultural Change, University of Chicago Press, vol. 52(3), pages 617-642, April.
    3. Pasquale Commendatore & Martin Currie, 2006. "A Dynamical Analysis Of Alternative Forms Of Agricultural Land Tenure," Metroeconomica, Wiley Blackwell, vol. 57(4), pages 443-463, November.
    4. Gwendoline Promsopha, 2018. "Risk†Coping, Land Tenure And Land Markets: An Overview Of The Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 32(1), pages 176-193, February.
    5. Ackerberg, Daniel A. & Botticini, Maristella, 2000. "The Choice of Agrarian Contracts in Early Renaissance Tuscany: Risk Sharing, Moral Hazard, or Capital Market Imperfections?," Explorations in Economic History, Elsevier, vol. 37(3), pages 241-257, July.
    6. Jun Yeong Lee & Grant Durbahn & Peter F. Orazem & Wendong Zhang, 2023. "The roles of risk preferences, selection, and uncertain returns on land contracts," Agricultural Economics, International Association of Agricultural Economists, vol. 54(2), pages 220-233, March.
    7. Tam'as Fleiner & Zsuzsanna Jank'o & Akihisa Tamura & Alexander Teytelboym, 2015. "Trading Networks with Bilateral Contracts," Papers 1510.01210, arXiv.org, revised May 2018.
    8. Hatfield, John William & Kominers, Scott Duke & Nichifor, Alexandru & Ostrovsky, Michael & Westkamp, Alexander, 2019. "Full substitutability," Theoretical Economics, Econometric Society, vol. 14(4), November.
    9. Elliott, Matthew & James, Harvey Jr., 2013. "Nature Of The Farm: Revisited," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150726, Agricultural and Applied Economics Association.
    10. Scott Duke Kominers & Alexander Teytelboym & Vincent P Crawford, 2017. "An invitation to market design," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 33(4), pages 541-571.
    11. M. A. Taslim, 1992. "A Survey of Theories of Cropshare Tenancy," The Economic Record, The Economic Society of Australia, vol. 68(3), pages 254-275, September.
    12. Braverman, Avishay & Guasch, J. Luis, 1989. "Rural credit in developing countries," Policy Research Working Paper Series 219, The World Bank.
    13. Gow, Hamish R. & Swinnen, Johan F.M., 2002. "Investment, and Contract Hold-Ups in Transition: Evidence from Hungary," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24853, European Association of Agricultural Economists.
    14. Hatfield, John William & Kominers, Scott Duke, 2017. "Contract design and stability in many-to-many matching," Games and Economic Behavior, Elsevier, vol. 101(C), pages 78-97.
    15. Bando, Keisuke & Hirai, Toshiyuki, 2021. "Stability and venture structures in multilateral matching," Journal of Economic Theory, Elsevier, vol. 196(C).
    16. Antonio Romero-Medina & Matteo Triossi, 2023. "Take-it-or-leave-it contracts in many-to-many matching markets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 75(2), pages 591-623, February.
    17. Leonhardt, Heidi & Penker, Marianne & Salhofer, Klaus, 2019. "Do farmers care about rented land? A multi-method study on land tenure and soil conservation," Land Use Policy, Elsevier, vol. 82(C), pages 228-239.
    18. Vassalos, Michael & Li, Yingbo, 2016. "Assessing the Impact of Fresh Vegetable Growers’ Risk Aversion Levels and Risk Preferences on the Probability of Adopting Marketing Contracts: A Bayesian Approach," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 19(1), pages 1-18, February.
    19. McConnell, Kenneth E. & Price, Michael, 2006. "The lay system in commercial fisheries: Origin and implications," Journal of Environmental Economics and Management, Elsevier, vol. 51(3), pages 295-307, May.
    20. Qiu, Feng & Goodwin, Barry K. & Gervais, Jean-Philippe, 2011. "An Empirical Investigation of the Linkages between Government Payments and Farmland Leasing Arrangements," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 36(3), pages 1-16.

    More about this item

    Keywords

    farmland leasing; heterogeneous factor; tenancy game equilibrium; contractual matching; china pattern;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:maneco:v:5:y:2018:i:1:p:12:n:1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.