Risk as impediment to privatization? The role of collective fields in extended agricultural households

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Résumé

As in the case of cooperatives, collective fields in extended agricultural households act as an insurance device but entail inefficiencies arising from the incentives to free ride on coworkers' efforts. Privatization provides good incentives but decreases the level of risk sharing. The classical analysis of this trade-off rules out another major risk-sharing mechanism, namely income transfers. This paper is a first attempt to merge the two insurance mechanisms: collective production, which is plagued by free riding, and income transfers, which are hampered by limited commitment. Privatization of land is shown to interact with incentives to abide by the insurance agreement, so that the trade-off between risk sharing and production may or may not be maintained with income transfers. We show that an increase in the value of the household members' exit option or a decrease in patience decreases the optimal rate of privatization, while larger households are more likely to privatize land.

langue originaleAnglais
Pages (de - à)863-905
Nombre de pages43
journalEconomic Development and Cultural Change
Volume67
Numéro de publication4
Les DOIs
étatPublié - 1 juil. 2019

Empreinte digitale

privatization
insurance
incentive
income
trade-off
co-worker
commitment
household
Incentives
Agricultural households
Income transfers
Impediments
Insurance
Privatization
Risk sharing
Values
land
Trade-offs
Household

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Risk as impediment to privatization? The role of collective fields in extended agricultural households. / Delpierre, Matthieu; Guirkinger, Catherine; Platteau, Jean Philippe.

Dans: Economic Development and Cultural Change, Vol 67, Numéro 4, 01.07.2019, p. 863-905.

Résultats de recherche: Contribution à un journal/une revueArticle

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