We study the impact of incomplete consumption risk-sharing on land misallocation in rural economies. We develop a general equilibrium model of land cultivation choices, where heterogeneous agricultural households face idiosyncratic output shocks and insure themselves by participating in a...

The main purpose of agricultural activity, which also applies to other economic activities, is to obtain economic benefits. Economic outcome of agricultural activity is a result of the production potential of the farms, organisation of agricultural production as well as various types of...