Endogenous matching and contractual choice among rice farmers in Bangladesh

Abstract

This paper examines the presence of potential bias arising from multiple sources of endogenous matching among the landlords, tenants and activities while choosing between crop sharing contract and fixed rent contract in the agricultural farming system. The study addresses this endogenous matching problem using data from rice farmers in rural Bangladesh. Although risk sharing explanation is found consistent with naïve estimation after controlling for possible sources of matching, it is found not to have significant influence on choosing a particular tenancy contract.