Horticultural Households Profit Optimization and the Efficiency of Labour Contract Choice

In agriculture, the coexistence of different forms of land tenancy or labour contract has been explained so far by several theories related to Marshallian inefficiency, incentives, risk sharing, and transaction costs, including supervision costs. These theories and the empirical evidences have greatly contributed to explain the reasons behind land tenancy or labour contract choice. This study follows up on this. Moreover, it intends to take a further step by focusing particularly on the production technologies at plot level, and by designing and testing a theoretical model based on household profit optimization. This model will take into account the supervision costs of labour (i) to compare optimum profit derived from plots based on household labour, a sharecropping labour contract, and a wage labour contract, controlling for irrigation equipment (ii) to test the efficiency of the labour contract choice using data from Senegal’s horticultural zone. As expected, the production elasticity of labour decreases when improved irrigation equipment like a motor pump is used. The technology displays an increasing return to scale on plots without a motor pump and a constant return to scale on plots irrigated with a motor pump. While on plots without a motor pump the sharecropping contract is the efficient labour contract choice, leading to a higher optimum profit for the household, on plots irrigated with a motor pump, the wage contract is the best labour contract choice. Consequently, we can conclude from this finding that the use of a motor pump drives out the sharecropping contract in favour of household labour and the wage labour contract.land tenancy, labour, sharecropping, wage, contract, supervision, household, profit optimization, efficient, irrigation equipment, horticulture, Senegal, Agricultural Finance,

Household Resources Allocation, Gender, and Economic Performance: Empirical Evidence from Senegal, West Africa

This paper has examined Pareto efficiency of household resources allocation and the appropriateness to use gender-specific models rather than unitary model while investigating economic performance of men and women managers of separate plots within horticultural households in Senegal, West Africa. This paper contributes to the gender and economics literature providing empirical evidence of intrahousehold resources allocation in a specific social, economic and cultural context in which polygamy occurs and where husband and wives manage separately their plots. The findings confirm the suitability of gender-specific models to shed light on the gender differential of performance. As the subject matter is efficiency, as well in econometric as in economic point of views, the findings provide evidence that there is gain in efficiency using gender-specific models rather than unitary model to illuminate the gender difference. From the findings can be concluded that Pareto optimum corresponding to the situation of allocative efficiency, is far from to be achieved by horticultural households. Some Pareto improvements can be made between men and women’s plots. The gender-specific models showed that women are less technically efficient than men. This suggested some policy implications more gender sensitive to improve men and women ability to manage more efficiently their productive resources

Gender and Experimental Measurement of Producers Risk Attitude Towards Output Market Price and its Effects on Economic Performance

Agricultural production is typically a risky business. Farm households have to tackle several risks. So, farm households’ risk attitude is an important issue connected with decision making and greatly affects their economic performance. Particularly in Senegal, for horticultural households, output market price is one of the foremost risks. Moreover, within the household, husband and wives may behave differently towards risk. This research provides theoretical and empirical evidence of measures and effects of risk attitude on economic performance and on choice of inputs across gender. More precisely, based on an experimental game implemented in of Senegal, this chapter investigates the gender dimension of risk attitude and the causal relationship between risk attitude and allocative inefficiency of choice of inputs. The results show that on average men and women producers display absolute risk aversion towards output market price, and that women are as risk averse as men. As expected, and in line with the theoretical model, the empirical evidence shows that allocative inefficiency in the use of inputs increases with risk aversion. We identify recommendations for policy decision makers in terms of strategies which may help to dampen men and women producers’ risk aversion towards output market price and repercussions for efficiency

Horticultural Households Profit Optimization and the Efficiency of Labour Contract Choice

In agriculture, the coexistence of different forms of land tenancy or labour contract has been explained so far by several theories related to Marshallian inefficiency, incentives, risk sharing, and transaction costs, including supervision costs. These theories and the empirical evidences have greatly contributed to explain the reasons behind land tenancy or labour contract choice. This study follows up on this. Moreover, it intends to take a further step by focusing particularly on the production technologies at plot level, and by designing and testing a theoretical model based on household profit optimization. This model will take into account the supervision costs of labour (i) to compare optimum profit derived from plots based on household labour, a sharecropping labour contract, and a wage labour contract, controlling for irrigation equipment (ii) to test the efficiency of the labour contract choice using data from Senegal’s horticultural zone. As expected, the production elasticity of labour decreases when improved irrigation equipment like a motor pump is used. The technology displays an increasing return to scale on plots without a motor pump and a constant return to scale on plots irrigated with a motor pump. While on plots without a motor pump the sharecropping contract is the efficient labour contract choice, leading to a higher optimum profit for the household, on plots irrigated with a motor pump, the wage contract is the best labour contract choice. Consequently, we can conclude from this finding that the use of a motor pump drives out the sharecropping contract in favour of household labour and the wage labour contract