Journal article
Contract duration and the division of labor in agricultural land leases
Journal of economic behavior & organization, Vol.65(3), pp.714-733
2008
Handle:
https://hdl.handle.net/2376/107538
Abstract
Short-term contracts provide weak incentives for durable input investment if post-contract asset transfer is difficult. Our model shows that when both agents provide inputs, optimal contract length balances the weak incentives of one agent against the other's. This perspective broadens the existing contract duration literature, which emphasizes the tradeoff between risk sharing and contracting costs. We develop hypotheses and test them based on private grazing contracts from the Southern Great Plains. We find broad support for the implications of our model. For example, landowners provide durable land-specific inputs more often under annual than multi-year contracts.
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Details
- Title
- Contract duration and the division of labor in agricultural land leases
- Creators
- Jonathan Yoder - School of Economic Sciences, Hulbert Hall 203G, Washington State University, Pullman, WA 99164-6210, United StatesIshrat Hossain - Centre for Health Economics Research and Evaluation, University of Technology, Sydney, AustraliaFrancis Epplin - Department of Agricultural Economics, Oklahoma State University, 416 Ag. Hall, Stillwater, OK 74708, United StatesDamona Doye - Department of Agricultural Economics, Oklahoma State University, 529 Ag. Hall, Stillwater, OK 74708, United States
- Publication Details
- Journal of economic behavior & organization, Vol.65(3), pp.714-733
- Academic Unit
- Water Research Center
- Publisher
- Elsevier B.V
- Identifiers
- 99900547035801842
- Language
- English
- Resource Type
- Journal article