The paper is published as a New Journal Paper and can be downloaded here.
Abstract of the paper
We investigate the extent of variation in output sharing in land rental contracts and alternative hypotheses to ex plain this variation. Close to half of the rental contracts in our study in northern Ethiopia have output shares that deviate from the dominant 50–50 equal sharing. Variation in land quality, the relative bargaining power of landlords and tenants, production risks and shocks are hypothesised to inﬂuence output shares. Matched data of landlords and tenants are used. The importance of endogenous matching of landlords and tenants is investigated by assessing how endogenous tenant characteristics are correlated with landlord characteristics.
We ﬁnd evidence of negative assortative matching for key resource characteristics. A contr ol function approach is used to control for endogenous matching in the output share models. The results reveal that production risks, as well as relative bargaining power, aﬀect output shares in the reverse tenancy setting where tenants are relatively wealthier and more inﬂuent ial than landlords.