Endogenous Matching and the Empirical Determinants of Contract Form

Posted: 28 May 2002

See all articles by Daniel A. Ackerberg

Daniel A. Ackerberg

University of California, Los Angeles (UCLA) - Department of Economics

Maristella Botticini

Bocconi University - Department of Economics

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Abstract

Empirical work on contracts typically regresses contract choice on observed principal and agent characteristics. If (i) some of these characteristics are unobserved or partially observed and (ii) there are incentives whereby particular types of agents end up contracting with particular types of principals, estimated coefficients on the observed characteristics may be misleading. We address this endogenous matching problem using a data set on agricultural contracts between landlords and tenants in early Renaissance Tuscany. Controlling for endogenous matching has an impact on parameters of interest, and tenants' risk aversion appears to have influenced contract choice.

Suggested Citation

Ackerberg, Daniel A. and Botticini, Maristella, Endogenous Matching and the Empirical Determinants of Contract Form. Journal of Political Economy, Vol. 110, June 2002. Available at SSRN: https://ssrn.com/abstract=309720

Daniel A. Ackerberg

University of California, Los Angeles (UCLA) - Department of Economics ( email )

Box 951477
405 Hilgard Avenue
Los Angeles, CA 90095-1477
United States

Maristella Botticini (Contact Author)

Bocconi University - Department of Economics ( email )

Via Gobbi 5
Milan, 20136
Italy

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