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The Efficiency of Sharecropping: Evidence from the Postbellum South

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  • Martin A. Garrett
  • Zhenhui Xu

Abstract

In this article, we investigate why sharecropping rose sharply in the postbellum South. Our hypothesis is that sharecropping was desirable because sharecropped farms could be more productive than owner‐operated farms and perhaps more productive than rented farms. Using the data from the postbellum South, we find strong empirical support for this hypothesis. Our results show that the output elasticity of sharecropped farms is higher than that of owner‐operated farms on all occasions and that of rented farms on some occasions. The differences in productivity are statistically significant, and the results are very robust. These empirical results refute the long‐held notion that sharecropping is inefficient. Contrary to the view that, like a tax, sharecropping produces disincentives to work, the results in this article suggest that sharecropping might have created an incentive among farmers for its rapid and widespread use in the postbellum South.

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  • Martin A. Garrett & Zhenhui Xu, 2003. "The Efficiency of Sharecropping: Evidence from the Postbellum South," Southern Economic Journal, John Wiley & Sons, vol. 69(3), pages 578-595, January.
    • Handle: RePEc:wly:soecon:v:69:y:2003:i:3:p:578-595
    DOI: 10.1002/j.2325-8012.2003.tb00514.x
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    References listed on IDEAS

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    1. Reid, Joseph D., 1973. "Sharecropping As An Understandable Market Response: The Post-Bellum South," The Journal of Economic History, Cambridge University Press, vol. 33(1), pages 106-130, March.
    2. Ransom, Roger L. & Sutch, Richard, 1972. "Debt Peonage in the Cotton South After the Civil War," The Journal of Economic History, Cambridge University Press, vol. 32(3), pages 641-669, September.
    3. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    4. Quibria, M. G. & Rashid, Salim, 1984. "The puzzle of sharecropping: A survey of theories," World Development, Elsevier, vol. 12(2), pages 103-114, February.
    5. Reid, Joseph D, Jr, 1977. "The Theory of Share Tenancy Revisited-Again," Journal of Political Economy, University of Chicago Press, vol. 85(2), pages 403-407, April.
    6. Otsuka, Keijiro & Hayami, Yujiro, 1988. "Theories of Share Tenancy: A Critical Survey," Economic Development and Cultural Change, University of Chicago Press, vol. 37(1), pages 31-68, October.
    7. Wright, Gavin, 1979. "Freedom and the Southern economy," Explorations in Economic History, Elsevier, vol. 16(1), pages 90-108, January.
    8. Shaban, Radwan Ali, 1987. "Testing between Competing Models of Sharecropping," Journal of Political Economy, University of Chicago Press, vol. 95(5), pages 893-920, October.
    9. D. Gale Johnson, 1950. "Resource Allocation under Share Contracts," Journal of Political Economy, University of Chicago Press, vol. 58(2), pages 111-111.
    10. Bliss, C. J. & Stern, N. H., 1982. "Palanpur: The Economy of an Indian Village," OUP Catalogue, Oxford University Press, number 9780198284192.
    11. Brinkley, Garland L., 1997. "The Decline in Southern Agricultural Output, 1860–1880," The Journal of Economic History, Cambridge University Press, vol. 57(1), pages 116-138, March.
    12. Alston, Lee J. & Higgs, Robert, 1982. "Contractual Mix in Southern Agriculture since the Civil War: Facts, Hypotheses, and Tests," The Journal of Economic History, Cambridge University Press, vol. 42(2), pages 327-353, June.
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    Cited by:

    1. Jiancai PI, 2013. "An organizational economics approach to the existence of sharecropping," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 59(11), pages 537-541.
    2. Jiancai PI, 2016. "Altruism, moral hazard, and sharecropping," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 62(12), pages 575-584.

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