Agriculture Reference
In-Depth Information
Table 9.1
Incentives under different organizations
Effort
Effort
Capital
Labor
moral hazard
specialization
constraints
monitoring
Family farm
No
No
Yes
No
Partnership
Some
Yes
Some
No
Corporate farm
Yes
Yes
No
Yes
PREDICTION 9.4
per year increases (holding constant the
number and length of stages), the total amount of time that a single task is undertaken
(L
∗
C)
As the number of cycles
(C)
increases over a given year, making the family farm less likely.
2
PREDICTION 9.5
As variance in the stage-specific shock
(σ
)
increases, the family farm
becomes more likely.
PREDICTION 9.6
As the costs of monitoring labor increase
( w)
, the family farm and
partnership becomes more likely.
Extent of the Farm
PREDICTION 9.7
As crop sensitivity to task timing
(δ)
increases, the farm is more likely
to control adjacent stages.
(d
∗
)
PREDICTION 9.8
As the variance in the optimal date
to complete a stage increases,
the farm is less likely to control adjacent stages.
(α)
PREDICTION 9.9
As the importance of task specialization
increases, the farm is more
likely to control adjacent stages.
Farm Capital and Farm Size
PREDICTION 9.10 As farm organization shifts from family farms to partnerships and
factory-corporate farms, capital stocks
(k)
per farm increase (see appendix B).
PREDICTION 9.11 As farm organization shifts from family farms to partnerships and
factory-corporate farms, farm size and farm output increase.
9.4
Empirical Analysis: Organization and Vertical Control
To test the predictions of our model, we examine industry case studies (historical and
contemporary) and analyze econometric evidence from our British Columbia-Louisiana
