AN ASSET-RISK MODEL OF REVERSE TENANCY

Reverse tenancy, wherein poorer landlords rent out land to richer tenants on shares, is a common phenomenon. Yet, it does not fit existing theoretical models of sharecropping and has never before been modeled in the development microeconomics literature. We explain reverse tenancy contracts using an asset risk model that incorporates moral hazard. When choosing the terms of an agrarian contract, the landlord considers the impact of her choice on the probability that she will retain future rights to the rented land. Thus, this model captures the effect of tenure insecurity and property rights on agrarian contracts. The main testable implication of the theoretical model is that, as property rights become more secure, reverse tenancy tends to disappear.


Issue Date:
2003
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/22132
Total Pages:
22
Series Statement:
Selected Paper




 Record created 2017-04-01, last modified 2017-04-26

Fulltext:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)