,(q-f)/h,isderivedwhenthema,giventhehighestvalueof(q-f)/h,thelandsizepertenant(T1)isdetermined,andthecorrespondingrentalpercentage,r,willbear/www.youxs.org,(q-f)/horrq/h,equalsthemarginalproductofland,.
AtT1also,wehavetheuniqueconditionfortherentalpercentage
Thisisidenticalwithourmathematicalsolution,wherewehave
sinceinourmathematicsweassumeonlyonetenantinput,f=Wt.
[1].,forexample,isnotyetimportantinthistheoryandisignored.
[2].Forsimplicityofpresentation,,however,thattheannualyield,q,mayincludeavarietyofcrops;giventheirrelativemarketprices,thevalueofeachmaybeexpressedintermsofonecrop,
[3].Toavoidsemanticproblems,,asisusuallythecase,therelevant”shifts”toconsiderarewhenq/,thetheoreticalouteisthesame.
[4].Giventheappropriatediscountrate,
,andthefutureinestreamfromtheland,Y1,Y2……,Yn,YinotnecessarilyequaltoYj,thereexistsa
,calledtherentalannuity,suchthat
Iftheprivatelandrightisperpetual,wehave
,whereV0isthepresentvalueofland.
[5].Thenotionthatrentisacostofproductionbegan,perhaps,ounts,foritisfromthisthatthelandvalueisderived.
[6].Itremainstoshowhowthelastplotoflandbelongingtothesamelandlordisallocated,hesametime,,atenantmayownasmallareaoflandhimself,,ifthelandsizeofthelastplotassignedtoatenantfamilyissmallerthantheequilibriumsize,thetenantwillemploypartofhisresourceselsewhere,possiblyoutsidethefarmingsector.
[7].Theterm”landhomogeneity”employedhere,whichpresupposesidenticalmarketlocation,renderstheunambiguouscondition:Giventhesamemaximumvaluesof(q-f)/handthesameratiosoftenantinputstolandindifferentfarms,,giventheproductionfunction,therentalpercentageandthelandsizepertenantwilldependon(1)tljefertilityoflandand(2)thecostoftenantinputs.
[8].Notethatthepeakofthishigher(q-f)*/,,wherethe(q-f)/h,orthenetreturntoland,(q-f)*/hatT1dividedbyq/h.
[9].Thefactthatmostleasesundersharetenancyarenotperpetualhasb,ssetholdingsofthecontractingparties,,seechapter4,sectionC.
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Anumberofquestions,boththeoreticalandempirical,relatedtosharetenancydeservefurtherinquiry,,however,answerstotwoquestionsaresought.
Letusbeginwiththequestion:Whatarethedifferencesbetweenfixed-rentandsharecontracts?Underprivateownershipofresources,thebasicdifferencebetweenfixedrentandsharetenancyliesinhowthechosenlabor-landratio(ortheratioofnonlandinputstoland),giventherentperacre,thetenantstateshowmuchlandhewillemploy,andhealonedecides-subjecttotheconstraintofpetitionaswithshare,however,thelando,thewealthmaximizsofcontracts,thesameresourceuseisimplied.