Assessing the Functioning of Land Rental Markets in Ethiopia
Although a large theoretical literature discusses the possible inefficiency of sharecropping contracts, the empirical evidence on this phenomenon has been ambiguous at best. Household-level fixed-effect estimates from about 8,500 plots operated by...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2007/12/8880225/assessing-functioning-land-rental-markets-ethiopia http://hdl.handle.net/10986/7556 |
| Summary: | Although a large theoretical literature
discusses the possible inefficiency of sharecropping
contracts, the empirical evidence on this phenomenon has
been ambiguous at best. Household-level fixed-effect
estimates from about 8,500 plots operated by households that
own and sharecrop land in the Ethiopian highlands provide
support for the hypothesis of Marshallian inefficiency. At
the same time, a factor adjustment model suggests that the
extent to which rental markets allow households to attain
their desired operational holding size is extremely limited.
Our analysis points towards factor market imperfections (no
rental for oxen), lack of alternative employment
opportunities, and tenure insecurity as possible reasons
underlying such behavior, suggesting that, rather than
worrying almost exclusively about Marshallian inefficiency,
it is equally warranted to give due attention to the policy
framework within which land rental markets operate. |
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