Unfair incentives: A behavioural note on sharecropping

Autor: Kristina Czura, Heiner Schumacher, Niels Kemper
Rok vydání: 2018
Předmět:
Zdroj: Economics of Transition. 26:303-331
ISSN: 0967-0750
DOI: 10.1111/ecot.12146
Popis: © 2018 The Authors Economics of Transition © 2018 The European Bank for Reconstruction and Development Published by Blackwell Publishing Ltd We conducted a laboratory-in-the-field experiment with real-life tenants in Ethiopia to test the incentive effects of fixed wage, sharecropping, fixed rent, and ownership contracts. The experimental task resembles a common process in agricultural production. The sharecropping contract is a piece rate scheme framed as a profit-sharing agreement. Sharecropping output was about 12 percent smaller than the fixed rent output. Surprisingly, it is statistically indistinguishable from the fixed wage output, despite substantial piece rates. This effect is driven by real-life sharecroppers. Their sharecropping output was smaller than that of non-sharecroppers, especially in a region where a controversial land reform took place. We argue that our subjects dislike sharecropping contracts because of the unfair profit sharing and the disputed allocation of land. Fairness concerns, therefore, may be another impediment to efficiency under the sharecropping contract. ispartof: Economics of Transition vol:26 issue:2 pages:303-331 status: published
Databáze: OpenAIRE
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