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The Rational Choice of Share Leasing and Implications for Efficiency

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  • J. G. Sutinen

Abstract

A formal statement of the theory of contractual choice is developed to derive conditions under which share leasing is rationally chosen. The allocative efficiency of share and nonshare leasing arrangements is compared under these conditions. Contrary to previous analyses, share leasing is shown to result in a higher expected level of farm output than otherwise. Therefore, land reform measures which restrict share leasing cannot be justified on grounds of improving productivity nor, as it turns out, on grounds of improving the sharecropper's welfare.

Suggested Citation

  • J. G. Sutinen, 1975. "The Rational Choice of Share Leasing and Implications for Efficiency," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 57(4), pages 613-621.
    • Handle: RePEc:oup:ajagec:v:57:y:1975:i:4:p:613-621.
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    File URL: http://hdl.handle.net/10.2307/1238879
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    1. Bardhan, P K & Srinivasan, T N, 1971. "Cropsharing Tenancy in Agriculture: A Theoretical and Empirical Analysis," American Economic Review, American Economic Association, vol. 61(1), pages 48-64, March.
    2. J. E. Stiglitz, 1969. "The Effects of Income, Wealth, and Capital Gains Taxation on Risk-Taking," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 83(2), pages 263-283.
    3. Rao, C H Hanumantha, 1971. "Uncertainty, Entrepreneurship, and Sharecropping in India," Journal of Political Economy, University of Chicago Press, vol. 79(3), pages 578-595, May-June.
    4. John T. Scott, 1970. "Leasing Recommendations for Less-Developed Countries: An Extension of Leasing Theory," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 52(4), pages 610-613.
    5. D. Gale Johnson, 1950. "Resource Allocation under Share Contracts," Journal of Political Economy, University of Chicago Press, vol. 58(2), pages 111-111.
    6. Dale W Adams & Norman Rask, 1969. "Economics of Cost-Share Leases: A Reply," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 51(3), pages 695-697.
    7. Kwan S. Kim, 1972. "Economics of Cropshare, Once Again: Comment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 54(4_Part_1), pages 686-688.
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    Cited by:

    1. Young, Douglas & Lin, William & Pope, Rulon & Robison, Lindon & Selley, Roger, 1979. "Risk Preferences Of Agricultual Producers:Their Measurement And Use," Risk Management in Agriculture: Behavioral, Managerial, and Policy Issues, January 25-26, 1979, San Francisco, California 271459, Regional Research Projects > W-149: An Economic Evaluation of Managing Market Risks in Agriculture.
    2. 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.
    3. Novak, Frank S. & Hornbaker, Robert H., 1987. "Impacts of Lease and Tenure Arrangements on Landlords and Farm Operators," 1987 Annual Meeting, August 2-5, East Lansing, Michigan 270134, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Orn B. Bodvarsson, 1987. "Monitoring with No Moral Hazard: The Case of Small Vessel Commercial Fishing," Eastern Economic Journal, Eastern Economic Association, vol. 13(4), pages 421-434, Oct-Dec.
    5. Bernat, G. Andrew, Jr., 1987. "Share Leasing And Production Efficiency," Staff Reports 278000, United States Department of Agriculture, Economic Research Service.
    6. Dillon, Carl R. & Oriade, Caleb A. & Parsch, Lucas D., 1998. "Production Risk Management Under Arkansas Soybean Rental Arrangements From The Tenant'S And Landlord'S Perspective," 1998 Annual meeting, August 2-5, Salt Lake City, UT 20781, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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