Incentives, supervision, and sharecropper productivity, Vol. 1 of 1

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Incentives, supervision, and sharecropper productivity

Author:	Jacoby, Hanan G.; Mansuri, Ghazala;	Collection Title:	Policy, Research working paper ; no. WPS 4125
Country:	Pakistan;	Date Stored:	2007/01/29
Document Date:	2007/02/01	Document Type:	Policy Research Working Paper
Language:	English	Region:	South Asia
Report Number:	WPS4125	SubTopics:	Economic Theory & Research; Municipal Housing and Land; Investment and Investment Climate; Contract Law; Urban Housing
Volume No:	1 of 1

Summary: Although sharecropping has long fascinated economists, the determinants of this contractual form are still poorly understood and the debate over the extent of moral hazard is far from settled. The authors address both issues by emphasizing the role of landlord supervision. When tenant effort is observable, but at a cost to the landlord, otherwise identical share-tenants can receive different levels of supervision and have different productivity. Unique data on monitoring frequency collected from sharetenants in rural Pakistan confirm that, controlling for selection, "supervised" tenants are significantly more productive than "unsupervised" ones. Landlords' decisions regarding the intensity of supervision and the type of incentive contract to offer depend importantly on the cost of supervising tenants.


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