Economics Article Review Example

The development of landowner-farming contract is crucial. The main idea is the focus on transaction cost approach, which is essential on issues of contact choice between land owners and farmers in the modern agriculture. The model begins from focusing on the contracts that are found in Midwestern agriculture. The model stresses the various incentives that are associated with the contacts, as well as elaborating on the choice between the cash-rent contracts and cropshare contracts. The initial domain of developing the model focuses on the farming in Midwest, which entail ownership of equipment and ownership of land. The issues of fixed wages play a key role in the development and analysis of the model. Analysis of what economists argue regarding cropshare contract brings out a picture of contact choice in modern agriculture. The comparative statics of contract choice tend to elaborate on the share of contracts, which is part of the model analysis and the minimization of costs. The transaction cost model center on unobservable parameters. The main idea also emphasizes on the creation of incentives as the platform for making choices of cropshare and cash-rent contracts. The model developed share provides evidence on farming practices and in-depth information on the impact of costs in contracts. The cost of enforcing various contracts plays critical roles in determining the variation of contracts. These imply that the aspect of contract choice is in one way or another dictated by the costs. On the other hand, the issues that do not elaborate on contract choice are the capital constraints. The model emphasize on contacts choice in the modern society and the issues that influence contract choice.