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Moral Hazard, Financial Constraints and Sharecropping in El Oulja

Laffont, Jean-Jacques and Matoussi, Mohamed Salah (1988) Moral Hazard, Financial Constraints and Sharecropping in El Oulja. Social Science Working Paper, 667. California Institute of Technology , Pasadena, CA. (Unpublished)

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This paper develops a theory of sharecropping which emphasizes the dual role of moral hazard in the provision of effort and financial constraints. The model is compatible with a large variety of contracts as observed in the region of El Ouija in Tunisia. Using an original set of data including financial data, various tests of the theory are realized. The role of financial constraints in the explanation of which type of contract is selected (as well as its implications that financial constraints affect effort and therefore output) are strongly supported by the data.

Item Type:Report or Paper (Working Paper)
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Additional Information:Published as Laffont, Jean-Jacques, and Mohamed Salah Matoussi. "Moral hazard, financial constraints and sharecropping in El Oulja." The Review of Economic Studies 62, no. 3 (1995): 381-399.
Group:Social Science Working Papers
Subject Keywords:Tenants, Landlords, Working capital, Risk aversion, Moral hazard models, Economic models, Wealth, Credit, Economic rent, Farm economics
Series Name:Social Science Working Paper
Issue or Number:667
Record Number:CaltechAUTHORS:20170907-140631840
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:81243
Deposited By: Jacquelyn Bussone
Deposited On:08 Sep 2017 20:38
Last Modified:03 Oct 2019 18:40

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