This paper examines the choice of farm organization and the extent of farm control, based on a model with moral hazard and gains from specialization. The model depends not only on the random variations in natural inputs, but also on the predictable seasonality inherent in farming. Seasonality and natural variability tend to make the family organization dominate for many stages of production. By identifying conditions in which these forces vary, we derive testable predictions about the choice of organization, and extent of farm integration.
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)