IDEAS home Printed from https://ideas.repec.org/a/ags/inrace/201781.html
   My bibliography  Save this article

Calculating shadow wages for family labour in agriculture : An analysis for Spanish citrus fruit farms

Author

Listed:
  • Picazo-Tadeo, Andrés J.
  • Reig-Martínez, Ernest

Abstract

This paper deals with the calculation of shadow wages for family labour in agriculture. Using the existence of a duality between input distance and cost functions, we use the former to derive individual labour shadow prices for a sample of Spanish citrus fruit producers. Our results show that the average shadow price representing the opportunity cost of family labour employed onfarm, is lower than the average market wage rate paid for hired labour. We relate this finding to a strategy of outsourcing of many growing tasks that is currently pursued by farmers to overcome the problems posed by a suboptimal farm size.

Suggested Citation

  • Picazo-Tadeo, Andrés J. & Reig-Martínez, Ernest, 2005. "Calculating shadow wages for family labour in agriculture : An analysis for Spanish citrus fruit farms," Cahiers d'Economie et de Sociologie Rurales (CESR), Institut National de la Recherche Agronomique (INRA), vol. 75.
    • Handle: RePEc:ags:inrace:201781
    DOI: 10.22004/ag.econ.201781
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/201781/files/75-5-21.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.201781?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Emmanuel Skoufias, 1994. "Using Shadow Wages to Estimate Labor Supply of Agricultural Households," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(2), pages 215-227.
    2. Nigel Key & Elisabeth Sadoulet & Alain De Janvry, 2000. "Transactions Costs and Agricultural Household Supply Response," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 245-259.
    3. Fare, Rolf & Grosskopf, Shawna, 1990. "A distance function approach to price efficiency," Journal of Public Economics, Elsevier, vol. 43(1), pages 123-126, October.
    4. Sadoulet, Elisabeth & de Janvry, Alain & Benjamin, Catherine, 1996. "Household Behavior With Imperfect Labor Markets," CUDARE Working Papers 25044, University of California, Berkeley, Department of Agricultural and Resource Economics.
    5. Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1973. "Transcendental Logarithmic Production Frontiers," The Review of Economics and Statistics, MIT Press, vol. 55(1), pages 28-45, February.
    6. Elhorst, J Paul, 1994. "Firm-Household Interrelationships on Dutch Dairy Farms," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 21(2), pages 259-276.
    7. Grosskopf, S, 1986. "The Role of the Reference Technology in Measuring Productive Efficiency," Economic Journal, Royal Economic Society, vol. 96(382), pages 499-513, June.
    8. Reig-Martinez, Ernest & Picazo-Tadeo, Andres J., 2004. "Analysing farming systems with Data Envelopment Analysis: citrus farming in Spain," Agricultural Systems, Elsevier, vol. 82(1), pages 17-30, October.
    9. Jacobsen, S. E., 1972. "On Shephard's duality theorem," Journal of Economic Theory, Elsevier, vol. 4(3), pages 458-464, June.
    10. Catherine Benjamin, 1996. "L'affectation du travail dans les exploitations agricoles : une application du modèle du ménage producteur et consommateur," Post-Print hal-01931619, HAL.
    11. Coggins, Jay S. & Swinton, John R., 1996. "The Price of Pollution: A Dual Approach to Valuing SO2Allowances," Journal of Environmental Economics and Management, Elsevier, vol. 30(1), pages 58-72, January.
    12. Schmitt, Gunther, 1991. "Why Is the Agriculture of Advanced Western Economies Still Organized by Family Farms? Will This Continue to Be So in the Future?," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 18(3-4), pages 443-458.
    13. Madior Fall & Thierry Magnac, 2004. "How Valuable Is On-Farm Work to Farmers?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 267-281.
    14. Fare, Rolf & Knox Lovell, C. A., 1978. "Measuring the technical efficiency of production," Journal of Economic Theory, Elsevier, vol. 19(1), pages 150-162, October.
    15. Hanan G. Jacoby, 1993. "Shadow Wages and Peasant Family Labour Supply: An Econometric Application to the Peruvian Sierra," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(4), pages 903-921.
    16. Hailu, Atakelty & Veeman, Terrence S., 2000. "Environmentally Sensitive Productivity Analysis of the Canadian Pulp and Paper Industry, 1959-1994: An Input Distance Function Approach," Journal of Environmental Economics and Management, Elsevier, vol. 40(3), pages 251-274, November.
    17. Isabelle Piot-Lepetit & Dominique Vermersch, 1998. "Pricing organic nitrogen under the weak disposability assumption : an application to the French pig sector," Post-Print hal-02299654, HAL.
    18. Francesc Hernández Sancho & Andrés Picazo & Ernest Reig Martínez, 1999. "- Shadow Prices And Distance Functions: An Analysis For Firms Of The Spanish Ceramic Pavements Industry," Working Papers. Serie EC 1999-19, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    19. Houshmand Ziari & Azzeddine Azzam, 1999. "Parametrizing nonparametric translog models: A goal programming/constrained regression study of U.S. manufacturing," Empirical Economics, Springer, vol. 24(2), pages 331-339.
    20. Isabelle Piot‐Lepetit & Dominique Vermersch, 1998. "Pricing Organic Nitrogen Under The Weak Disposability Assumption: An Application to the French Pig Sector," Journal of Agricultural Economics, Wiley Blackwell, vol. 49(1), pages 85-99, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Makuya, V. & Ndyetabula, D. & Mpenda, Z., 2018. "cost efficiency of watermelon production in Tanzania," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277128, International Association of Agricultural Economists.
    2. Mercedes Beltrán-Esteve & Andrés J. Picazo-Tadeo & Ernest Reig-Martínez, 2012. "What makes a citrus farmer go organic? Empirical evidence from Spanish citrus farming," Working Papers 1205, Department of Applied Economics II, Universidad de Valencia.
    3. Harald Lang & Armin-D. Riess, 2019. "Shadow wages in cost-benefit rules for project and policy analyses: estimates for OECD countries," DEM Discussion Paper Series 19-05, Department of Economics at the University of Luxembourg.
    4. Picazo-Tadeo, Andres J. & Reig-Martinez, Ernest, 2007. "Farmers' costs of environmental regulation: Reducing the consumption of nitrogen in citrus farming," Economic Modelling, Elsevier, vol. 24(2), pages 312-328, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wang, Xiaobing, 2007. "Labor market behavior of Chinese rural households during transition," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 42, number 92321.
    2. Wang, Xiaobing & Herzfeld, Thomas & Glauben, Thomas, 2007. "Labor allocation in transition: Evidence from Chinese rural households," China Economic Review, Elsevier, vol. 18(3), pages 287-308.
    3. Parisa Aghajanzadeh-Darzi & Pierre-Alain Jayet & Athanasios Petsakos, 2017. "Improvement of a Bio-Economic Mathematical Programming Model in the Case of On-Farm Source Inputs and Outputs," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 15(3), pages 489-508, September.
    4. Lee, Myunghun, 2007. "Measurement of the in situ value of exhaustible resources: An input distance function," Ecological Economics, Elsevier, vol. 62(3-4), pages 490-495, May.
    5. Tocco, Barbara & Davidova, Sophia & Bailey, Alastair Creation-Date: 2012-02, "undated". "Key Issues in Agricultural Labour Markets: A Review of Major Studies and Project Reports on Agriculture and Rural Labour Markets," Factor Markets Working Papers 126, Centre for European Policy Studies.
    6. Ito, Takahiro, 2009. "Caste discrimination and transaction costs in the labor market: Evidence from rural North India," Journal of Development Economics, Elsevier, vol. 88(2), pages 292-300, March.
    7. Henning, Christian H.C.A. & Henningsen, Arne, 2005. "Modeling Price Response of Farm Households Under Imperfect Labor Markets: A Farm Household Approach to Family Farms in Poland," 94th Seminar, April 9-10, 2005, Ashford, UK 24431, European Association of Agricultural Economists.
    8. Tsuda, Shunsuke, 2022. "Refugee inflows, surplus farm labor, and crop marketization in rural Africa," Journal of Development Economics, Elsevier, vol. 155(C).
    9. Lee, Myunghun & Zhang, Ning, 2012. "Technical efficiency, shadow price of carbon dioxide emissions, and substitutability for energy in the Chinese manufacturing industries," Energy Economics, Elsevier, vol. 34(5), pages 1492-1497.
    10. Soledad Moya & Jordi Perramon & Anselm Constans, 2005. "IFRS Adoption in Europe: The Case of Germany," Working Papers 0501, Departament Empresa, Universitat Autònoma de Barcelona, revised Feb 2005.
    11. Jon Rezek & Benjamin F. Blair, 2005. "Abatement Cost Heterogeneity In Phase I Electric Utilities," Contemporary Economic Policy, Western Economic Association International, vol. 23(3), pages 324-340, July.
    12. Chen, Jing & Rozelle, Scott, 2003. "Market Emergence And The Rise And Fall Of Backyard Hog Production In China," 2003 Annual meeting, July 27-30, Montreal, Canada 21969, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    13. Hailu, Atakelty & Hailu, Atakelty, 2003. "Pollution abatement and productivity performance of regional Canadian pulp and paper industries," Journal of Forest Economics, Elsevier, vol. 9(1), pages 5-25.
    14. repec:hal:journl:dumas-00802135 is not listed on IDEAS
    15. Correa, Juan A. & Gómez, Marcos & Luengo, Andrés & Parro, Francisco, 2021. "Environmental misallocation in the copper industry," Resources Policy, Elsevier, vol. 71(C).
    16. Serra, Teresa & Chambers, Robert G. & Oude Lansink, Alfons, 2014. "Measuring technical and environmental efficiency in a state-contingent technology," European Journal of Operational Research, Elsevier, vol. 236(2), pages 706-717.
    17. Benjamin, Catherine & Gallic, Ewen, 2018. "Does climate change influence demand ? Indian household behavior with imperfect labor markets," 2018 Annual Meeting, August 5-7, Washington, D.C. 274185, Agricultural and Applied Economics Association.
    18. Maria Jones & Florence Kondylis & John Loeser & Jeremy Magruder, 2022. "Factor Market Failures and the Adoption of Irrigation in Rwanda," American Economic Review, American Economic Association, vol. 112(7), pages 2316-2352, July.
    19. Escobal, Javier, 2005. "The Role of Public Infraestructure in Market Development in Rural Peru," MPRA Paper 727, University Library of Munich, Germany.
    20. Ekbom, Anders & Sterner, Thomas, 2009. "Soil Properties and Soil Conservation Investments in Agricultural Production - a Case study of Kenya’s Central Highlands," Working Papers in Economics 340, University of Gothenburg, Department of Economics.
    21. Aiken, Deborah Vaughn, 2006. "Application of the distance function to nonmarket valuation of environmental goods and services: An illustrative example," Ecological Economics, Elsevier, vol. 60(1), pages 168-175, November.

    More about this item

    Keywords

    Labor and Human Capital;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:inrace:201781. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/inratfr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.