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The Farm Lease: An Analysis of Owner‐Tenant and Landlord Preferences under Risk
Author(s) -
Apland Jeffrey,
Barnes Robert N.,
Justus Fred
Publication year - 1984
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1240805
Subject(s) - landlord , leasehold estate , lease , business , risk neutral , variety (cybernetics) , renting , finance , microeconomics , economics , engineering , mathematics , statistics , civil engineering , political science , law
A variety of farm lease terms are examined with respect to the preferences of an owner‐tenant and landlord under risk. The owner‐tenant's optimal crop mix is examined for six common leasing arrangements. A variant of the MOTAD model is used to derive the optimal crop mix for a risk‐neutral and risk‐averse owner‐tenant. For two share leases, the trade‐offs between the owner‐tenant's and landlord's preferences are examined with each agent given neutral and averse risk postures. Results suggest the importance of mixed tenancy and risk in the selection of lease terms for farm land.