The Validity of Marshallian Hypothesis among the Ethiopian Tenant Farmers: Efficiency Difference Between Sharecropping and Fixed Rent Tenant Farmers

Abstract

11lis study allempts to estimate tecl/nical efficiency alld examines jts
difference between sharecropping and fIXed relll leI/alit fa rmers. A
Stochastic froll/ier Cobb-Douglass production fUllclion was
estimated based all the data of 144 tenalll households obtained from
the First Round Ethiopian Household Survey of the Economics
Departmelll of the Addis Ababa University. 17le result indicated that
ail tellalll farmers 011 the average operated at about 62.5 percent of
Iheir technical efficiency. 111e findings tended to go in line with the
Marshalliall hypothesis or Tellalll Models. which predicts thaI a
sharecropper ufldersupplies vadable inputs alld operates less
efficiently as compared to a tenalll thaI works unde; the fixed relll
arrallgemellf. 111e fif/dillg tellded to suggest thai landowllers alld
tellallls should cOllsider fixed relll arrallgemelll as it could generate
relatively higher level of efficiency of factor inputs and maximize
their mulual benefits