Incentives and Moral Hazard: Plot Level Productivity of Factory-Operated and Outgrower-Operated Sugarcane Production in Ethiopia

摘要: We investigate the unique contractual arrangement between a large Ethiopian sugar factory and its adjacent outgrower associations. The only significant difference sugarcane production on factory-operated plantation outgrower-operated plots is remuneration system thus, incentives to workers. compare productivity of with based new cross-sectional plot-level data set that includes all are operated by As sugar-cane depends various exogenous factors measured as categorical variables (e.g. soil type, cane variety, etc.), we estimate function nonparametric kernel regression method takes into account both continuous explanatory without assuming functional form imposing restrictions interactions variables. In order obtain meaningful measures, impose monotonicity in input quantities using constrained weighted bootstrapping (CWB) method. Our results show have−ceteris paribus−a statistically economically significantly higher than plots, which can be explained outgrowers having stronger put more effort their work employees factory.