Impact of Risk and Kinship Relations on Tenancy Contract Form: A Case Study in Rural Java

摘要

From the viewpoint of modern contract theory, a large number of papers postulate alternative hypotheses to explain the reason why a particular contract form for land tenancy is chosen. Among these, the following researches propose the key hypotheses related to our observation in the study area. Cheung [5] and Stiglitz [14] postulate a trade-off between risk and incentives. Stiglitz [14] shows that the share tenancy contract is an optimal contract if the tenant is a risk averter and the landowner is risk neutral. Rao [11] and Allen and Lueck [2], [3] found evidence contradicting the hypothesis of risk sharing and contract choice by Cheung [5] and Stiglitz [14]. In particular, Allen and Lueck [2], [3] empirically reject Cheung and Stiglitz's hypothesis, but more recently, Ackerberg and Botticini [1] find that their regression results, taking into consideration "endogenous matching," are more compatible with the risk sharing hypothesis than the naive regression analysis conducted by Allen and Lueck [2], [3].