Are production risk and labour market risk covariant?
AbstractWhile in a given situation the production risk that farmers face may well be independent of the labour market risk, in general these may be highly related in the context of the local labour market. The strength of this relationship has important implications not only for the correct specification of the household model under risk, but also for addressing the issue whether the farm household can use the labour market as a hedge against production uncertainty. Clearly, if the two risks are covariant, the possibility of doing so may be very small. If, instead, they are independent, the farm household may avail of the local casual labour market to balance the production risk it faces. Using a large sample of farmers we find that labour market risk and production risk are not causally related in the Granger sense. © 1998 John Wiley & Sons, Ltd.
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Bibliographic InfoArticle provided by John Wiley & Sons, Ltd. in its journal Journal of International Development.
Volume (Year): 10 (1998)
Issue (Month): 1 ()
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- Granger, C. W. J., 1981. "Some properties of time series data and their use in econometric model specification," Journal of Econometrics, Elsevier, vol. 16(1), pages 121-130, May.
- Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-72, June.
- Kanwar, Sunil, 1998. "Wage responsiveness of labour supply and demand in nonclearing rural markets: the case of Indian agriculture," Economics Letters, Elsevier, vol. 61(3), pages 395-402, December.
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