Your Mother-In-Law as an Insurance Device: Household Structure, Risk, and
Contract Choice in Early Renaissance Tuscany


Kyle Kauffman
Associate Professor of Economics, Wellesley College

November 9, 2001

Abstract

The theoretical and empirical work on contract choice in agriculture argues that a multiplicity of possible factors are at play in the determination of the "optimal contract." Recent work has identified transactions costs, risk, moral hazard, monitoring, capital constraints, and multiple tasks, among others as the leading contenders. In this paper we take into account household structure as an additional determinant of contract choice. The main testable hypothesis is that family members differentially affect household risk, and therefore contract choice, based on age, gender, and relationship to the household head. We test this hypothesis with data from a sample of over 1000 contracts in fifteenth-century Tuscany.

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