Alemu, TekieDeininger, KlausAli, Daniel Ayalew2012-06-082012-06-082007-12https://hdl.handle.net/10986/7556Although a large theoretical literature discusses the possible inefficiency of sharecropping contracts, the empirical evidence on this phenomenon has been ambiguous at best. Household-level fixed-effect estimates from about 8,500 plots operated by households that own and sharecrop land in the Ethiopian highlands provide support for the hypothesis of Marshallian inefficiency. At the same time, a factor adjustment model suggests that the extent to which rental markets allow households to attain their desired operational holding size is extremely limited. Our analysis points towards factor market imperfections (no rental for oxen), lack of alternative employment opportunities, and tenure insecurity as possible reasons underlying such behavior, suggesting that, rather than worrying almost exclusively about Marshallian inefficiency, it is equally warranted to give due attention to the policy framework within which land rental markets operate.CC BY 3.0 IGOAGENTSAGRICULTURAL ECONOMICSAGRICULTURAL LANDAGRICULTUREALLOCATION OF LANDATTRITIONBARRIERS TO ENTRYCOMPARATIVE ADVANTAGECONTRACTUAL ARRANGEMENTSCULTIVATED LANDCULTIVATIONDEVELOPMENT ECONOMICSECONOMETRIC ANALYSISECONOMIC DEVELOPMENTECONOMIC EFFICIENCYECONOMIC GROWTHECONOMIES OF SCALEEFFICIENT OUTCOMESEMINENT DOMAINEMPLOYMENTEMPLOYMENT OPPORTUNITIESEVICTIONSFACTOR MARKETSFAMILY LABORFARM SIZEFERTILIZER USEFUTURE RESEARCHGENERAL EQUILIBRIUMGINI COEFFICIENTHOUSEHOLDSHUMAN CAPITALINCENTIVE EFFECTSINCOMEINEFFICIENCYINHERITANCEINSURANCEIRRIGATED LANDLABOR MARKETSLAND ADMINISTRATIONLAND DISTRIBUTIONLAND ECONOMICSLAND LEASINGLAND MARKETSLAND OWNERSLAND OWNERSHIPLAND PRODUCTIVITYLAND QUALITYLAND REDISTRIBUTIONLAND REFORMLAND RENTALLAND RESOURCESLAND RIGHTSLAND SETTLEMENTLAND TENANCYLAND TENURELAND TRANSFERSLAND USELANDLORDSMARGINAL PRODUCTMORAL HAZARDMOTIVATIONOUTPUTSPERFECT INFORMATIONPERFECT MARKETSPOINTSPOLITICAL ECONOMYPRODUCTION EFFICIENCYPRODUCTION FUNCTIONPRODUCTION INPUTSPRODUCTION PROCESSRESIDUAL RISKRISK AVERSIONRISK NEUTRALRURAL LAND USESHARECROPPINGSITESSOCIAL CAPITALSOIL EROSIONSOIL QUALITYSUPPLIERSTAXATIONTENANTSTOPOGRAPHYURBAN DEVELOPMENTUTILITY MAXIMIZATIONVARIABLE INPUTSWEALTHWORKING CAPITALWorld Bank10.1596/1813-9450-4442