WIDER Seminar Series - Selim Gulesci on tenancy contracts in agriculture

At the 1 November seminar, Selim Gulesci will present results on tenancy contracts in agriculture. 

Abstract – Moral hazard: Experimental evidence from tenancy contract

This paper reports results from a field experiment designed to estimate the effects of tenancy contracts on agricultural input choices, risk-taking, and output. The experiment induced exogenous variation in the terms of sharecropping contracts: some tenants pay 50% of output in compensation for the land; others pay only 25%; a third group pays 50% of output and receives cash, either fixed or stochastic. We find that tenants who keep a higher output share increase input usage and cultivate riskier crops. Their output increases by 60% relative to control. No such effect is found in the cash group. We interpret the increase in output as the incentive effect of tenancy contracts.

WIDER Seminar Series

The WIDER Seminar Series showcases recent and ongoing work on key topics in development economics. The weekly sessions held in Helsinki are open to local and visiting researchers, policy makers, and others working on development topics. Click here to read more about the WIDER Seminar Series.