Incentives and moral hazard: plot level productivity of factory-operated and outgrower-operated sugarcane production in Ethiopia
研究了埃塞俄比亚一家大型糖厂与外包农户的合同安排，发现外包农户的土地生产率显著高于工厂自营地块，原因是外包农户有更强的激励投入更多劳动。
We investigate the unique contractual arrangement between a large Ethiopian sugar factory and its adjacent outgrower associations. The only significant difference between the sugarcane production on the factory-operated sugarcane plantation and on the outgrower-operated plots is the remuneration system and thus, the incentives to the workers. We compare the productivity of these two production schemes using a cross-sectional plot-level data set. As sugarcane production depends on various exogenous factors that are measured as categorical variables (e.g., soil type, cane variety, etc.), we estimate the production function by a nonparametric kernel regression method that takes into account both continuous and categorical explanatory variables without assuming a functional form and without imposing restrictions on interactions between the explanatory variables. Our results show that outgrower-operated plots have—ceteris paribus—a statistically and economically significantly higher productivity than factory-operated plots, which can be explained by outgrowers having stronger incentives to put more effort into their work than the employees of the sugar factory.