1. Even if there is not a well-developed rural labor market that offers off-farm wage opportunities, we would still expect land to be leased until differences in the marginal product of labor across farm sizes disappeared. Only in the case where neither set of markets is working well would we find small peasant farms using land more intensively. More formally, if imperfections are present in at least two of the factor markets (that is, markets for land, labor, capital, and draft animals), the factor price ratios that peasant households implicitly face will differ. Assuming profit maximization, this implies that optimal factor combinations will differ among farm households, as will output/input ratios.
2. American Indian Relative Ranching Efficiency;Trosper;American Economic Review,1978
3. Tenancy Choice in a Competitive Framework with Transactions Costs
4. This research was carried out with a grant from the Andrew P. Mellon Foundation. Earlier drafts have benefited from comments from Sandra Archibald, Melvin Fuss, Paul Hohenberg, Donald McCloskey, Ramon Myers, Thomas Wiens, and two anonymous referees, and from participants at seminars at the University of California, Davis, and the University of Toronto.