[go: up one dir, main page]
More Web Proxy on the site http://driver.im/
IDEAS home Printed from https://ideas.repec.org/a/ucp/jlawec/v41y1998i2p343-86.html
   My bibliography  Save this article

The Nature of the Farm

Author

Listed:
  • Allen, Douglas W
  • Lueck, Dean
Abstract
Using a model based on a trade-off between moral hazard incentives and gains from specialization, this paper explains why farming has generally not converted from small, family-based firms into large, factory-style corporate firms. Nature is both seasonal and random, and the interplay of these qualities generates moral hazard, limits the gains from specialization, and causes timing problems between stages of production. By identifying conditions in which these forces vary, we derive testable predictions about the choice of organization and the extent of farm integration. To test these predictions we study the historical development of several agricultural industries and analyze data from a sample of over 1,000 farms in British Columbia and Louisiana. In general, seasonality and randomness so limit the benefits of specialization that family farms are optimal, but when farmers are successful in mitigating the effects of seasonality and random shocks to output, farm organizations gravitate toward factory processes and corporate ownership. Copyright 1998 by the University of Chicago.

Suggested Citation

  • Allen, Douglas W & Lueck, Dean, 1998. "The Nature of the Farm," Journal of Law and Economics, University of Chicago Press, vol. 41(2), pages 343-386, October.
    • Handle: RePEc:ucp:jlawec:v:41:y:1998:i:2:p:343-86
    DOI: 10.1086/467393
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/467393
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: https://libkey.io/10.1086/467393?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gary S. Becker & Kevin M. Murphy, 1994. "The Division of Labor, Coordination Costs, and Knowledge," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 299-322, National Bureau of Economic Research, Inc.
    2. George Baker & Michael Gibbs & Bengt Holmstrom, 1994. "The Wage Policy of a Firm," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(4), pages 921-955.
    3. ., 1994. "Firm, Boundaries of the," Chapters, in: Geoffrey M. Hodgson & Warren J. Samuels & Marc R. Tool (ed.), The Elgar Companion to Institutional and Evolutionary Economics, volume 0, chapter 43, Edward Elgar Publishing.
    4. Anderson, Terry L & Lueck, Dean, 1992. "Land Tenure and Agricultural Productivity on Indian Reservations," Journal of Law and Economics, University of Chicago Press, vol. 35(2), pages 427-454, October.
    5. Holmstrom, Bengt & Milgrom, Paul, 1994. "The Firm as an Incentive System," American Economic Review, American Economic Association, vol. 84(4), pages 972-991, September.
    6. John M. Brewster, 1950. "The Machine Process in Agriculture and Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 32(1), pages 69-81.
    7. Raup, Philip M., 1973. "Corporate Farming in the United States," The Journal of Economic History, Cambridge University Press, vol. 33(1), pages 274-290, March.
    8. ., 1994. "Firm, Theoru of the (I)," Chapters, in: Geoffrey M. Hodgson & Warren J. Samuels & Marc R. Tool (ed.), The Elgar Companion to Institutional and Evolutionary Economics, volume 0, chapter 44, Edward Elgar Publishing.
    9. Daniel A. Sumner, 1991. "Targeting Farm Programs," Contemporary Economic Policy, Western Economic Association International, vol. 9(1), pages 93-106, January.
    10. ., 1994. "Firm, Theoru of the (II)," Chapters, in: Geoffrey M. Hodgson & Warren J. Samuels & Marc R. Tool (ed.), The Elgar Companion to Institutional and Evolutionary Economics, volume 0, chapter 45, Edward Elgar Publishing.
    11. anonymous, 1994. "Research confirms rationality of analysts' forecasts," Economics Update, Federal Reserve Bank of Atlanta, issue Apr, pages 1-2.
    12. Knoeber, Charles R, 1989. "A Real Game of Chicken: Contracts, Tournaments, and the Production of Broilers," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 5(2), pages 271-292, Fall.
    13. Pryor, Frederic L., 1982. "The plantation economy as an economic system," Journal of Comparative Economics, Elsevier, vol. 6(3), pages 288-317, September.
    14. Knoeber, Charles R, 1997. "Explaining State Bans on Corporate Farming," Economic Inquiry, Western Economic Association International, vol. 35(1), pages 151-166, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Uwe Jirjahn & Jens Mohrenweiser, 2019. "Performance Pay and Applicant Screening," British Journal of Industrial Relations, London School of Economics, vol. 57(3), pages 540-575, September.
    2. Brickley, James A, 1999. "Incentive Conflicts and Contractual Restraints: Evidence from Franchising," Journal of Law and Economics, University of Chicago Press, vol. 42(2), pages 745-774, October.
    3. Amirah El-Haddad, 2013. "Political Patronage and Economic Opportunity: The Case of Vertical Integration in the Egyptian Clothing Industry," Working Papers 797, Economic Research Forum, revised Nov 2013.
    4. Guadalupe, Maria & Wulf, Julie, 2009. "The Flattening Firm and Product Market Competition," CEPR Discussion Papers 7253, C.E.P.R. Discussion Papers.
    5. Dongsoo Shin & Roland Strausz, 2014. "Delegation and dynamic incentives," RAND Journal of Economics, RAND Corporation, vol. 45(3), pages 495-520, September.
    6. Kim, Jinyoung, 2017. "Racing against Time in Research: A Study of the 1995 U.S. Patent Law Amendment," IZA Discussion Papers 10815, Institute of Labor Economics (IZA).
    7. Kirkegaard, René, 2017. "A unifying approach to incentive compatibility in moral hazard problems," Theoretical Economics, Econometric Society, vol. 12(1), January.
    8. Bengt Holmström, 2017. "Pay for Performance and Beyond," American Economic Review, American Economic Association, vol. 107(7), pages 1753-1777, July.
    9. Oriana Bandiera & Renata Lemos & Andrea Prat & Raffaella Sadun, 2018. "Managing the Family Firm: Evidence from CEOs at Work," The Review of Financial Studies, Society for Financial Studies, vol. 31(5), pages 1605-1653.
    10. Rossella Argenziano & Sergei Severinov & Francesco Squintani, 2016. "Strategic Information Acquisition and Transmission," American Economic Journal: Microeconomics, American Economic Association, vol. 8(3), pages 119-155, August.
    11. Felli, Leonardo & Hortala-Vallve, Rafael, 2016. "Collusion, Blackmail and Whistle-Blowing," Quarterly Journal of Political Science, now publishers, vol. 11(3), pages 279-312, October.
    12. Mathias Dewatripont & Jean Tirole, 2005. "Modes of Communication," Journal of Political Economy, University of Chicago Press, vol. 113(6), pages 1217-1238, December.
    13. Asuyama, Yoko, 2016. "Delegation to workers across countries and industries : social capital and coordination needs matter," IDE Discussion Papers 620, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    14. Hornstein, Andreas & Krusell, Per & Violante, Giovanni L., 2005. "The Effects of Technical Change on Labor Market Inequalities," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 20, pages 1275-1370, Elsevier.
    15. Lindbeck, A & Snower, D-J, 1996. "Centralized Bargaining, Multi-Tasking, and Work Incentives," Papers 620, Stockholm - International Economic Studies.
    16. repec:eee:labchp:v:3:y:1999:i:pb:p:2373-2437 is not listed on IDEAS
    17. Carr, Michael D., 2011. "Work hours and wage inequality: Evidence from the 2004 WERS," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(4), pages 417-427, August.
    18. Tobias Kretschmer & Eugenio J. Miravete & Jose C. Pernias, 2012. "Competitive Pressure and the Adoption of Complementary Innovations," American Economic Review, American Economic Association, vol. 102(4), pages 1540-1570, June.
    19. Tomoo Kikuchi & Kazuo Nishimura & John Stachurski, 2012. "Coase meets Tarski: New Insights from Coase's Theory of the Firm," KIER Working Papers 828, Kyoto University, Institute of Economic Research.
    20. Sergio Currarini, 2007. "Network design in games with spillovers," Review of Economic Design, Springer;Society for Economic Design, vol. 10(4), pages 305-326, March.
    21. Michael Gibbs & Alec Levenson & Cindy Zoghi, 2010. "Why are jobs designed the way they are?," Research in Labor Economics, in: Jobs, Training, and Worker Well-being, pages 107-154, Emerald Group Publishing Limited.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jlawec:v:41:y:1998:i:2:p:343-86. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journals Division (email available below). General contact details of provider: https://www.journals.uchicago.edu/JLE .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.