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

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Author Info
Andrés J. Picazo-Tadeo () (Universitat de València, Dpto. Economía Aplicada II, Avda dels Tarongers s/n., 46022 Valencia Spain)
Ernest Reig-Martínez (Universitat de València and Instituto Valenciano de Investigaciones Económicas, Guardia Civil, 22, 46020 Valencia Spain)

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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.

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Publisher Info
Article provided by INRA Department of Economics in its journal Cahiers d'Economie et Sociologie Rurales.

Volume (Year): 75 (2005)
Issue (Month): ()
Pages: 5-21
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Handle: RePEc:rae:jouces:v:75:y:2005:i::p:5-21

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Related research
Keywords: shadow prices; duality; distance functions; on-farm labour opportunity cost; outsourcing;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. 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. [Downloadable!] (restricted)
  2. 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. [Downloadable!] (restricted)
  3. Jacobsen, S. E., 1972. "On Shephard's duality theorem," Journal of Economic Theory, Elsevier, vol. 4(3), pages 458-464, June. [Downloadable!] (restricted)
  4. 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. [Downloadable!] (restricted)
  5. 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. [Downloadable!] (restricted)
  6. Fare, Rolf & Grosskopf, Shawna, 1990. "A distance function approach to price efficiency," Journal of Public Economics, Elsevier, vol. 43(1), pages 123-126, October. [Downloadable!] (restricted)
  7. 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). [Downloadable!]
  8. Jacoby, Hanan G, 1993. "Shadow Wages and Peasant Family Labour Supply: An Econometric Application to the Peruvian Sierra," Review of Economic Studies, Blackwell Publishing, vol. 60(4), pages 903-21, October. [Downloadable!] (restricted)
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  9. 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. [Downloadable!] (restricted)
  10. 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, Blackwell Publishing, vol. 49(1), pages 85-99. [Downloadable!] (restricted)
  11. Elhorst, J Paul, 1994. "Firm-Household Interrelationships on Dutch Dairy Farms," European Review of Agricultural Economics, Oxford University Press for the Foundation for the European Review of Agricultural Economics, vol. 21(2), pages 259-76.
  12. Key, Nigel & Sadoulet, Elisabeth & de Janvry, Alain, 2000. " Transactions Costs and Agricultural Household Supply Response," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 82(2), pages 245-59, May. [Downloadable!] (restricted)
  13. Madior Fall ; Thierry Magnac, 2002. "How Valuable is On-Farm Work to Farmers ?," Working Papers 2002-35, Centre de Recherche en Economie et Statistique. [Downloadable!]
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