Events at CERGE-EI
Monday, 16 October, 2017 | 14:00 | Applied Micro Research Seminar
Selim Gulesci, Ph.D. (Bocconi U.) “Moral Hazard: Experimental Evidence from Tenancy Contracts”
Bocconi University, Milan, Italy
Authors: Konrad Burchardi, Selim Gulesci, Benedetta Lerva, and Munshi Sulaiman
Abstract: We report results from a field experiment designed to estimate the effects of tenancy contracts on agricultural input choices, risk-taking, and output. The experiment induced variation in the terms of sharecropping contracts: some tenants paid 50% of output in compensation for land usage; others paid 25%; again others paid 50% of output and received cash, either fixed or stochastic. We find that tenants with higher output share utilized more inputs, cultivated riskier crops, and generated 60% more output relative to control. Cash transfers did not effect farm output. We interpret the increase in output as the incentive effect of sharecropping.
Full Text: “Moral Hazard: Experimental Evidence from Tenancy Contracts”
