Testing for Separability in Household Models with Heterogeneous Behavior: A Mixture Model Approach
AbstractKnowing whether a household behaves according to separability or non-separability is needed for the correct modeling of production decisions. We propose a superior test to those found in the literature on separability by using a mixture distribution approach to estimate the probability that a farm household behaves according to non-separability, and test that the determinants of consumption affect production decisions for households categorized as non-separable. With non-separability attributed to labor market constraints, the switcher equation shows that Peruvian farm households that are indigenous and young, with low levels of education, and lack of local employment opportunities are more likely to be constrained on the labor market.
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Bibliographic InfoPaper provided by Department of Agricultural & Resource Economics, UC Berkeley in its series Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series with number qt4hs3g5dj.
Date of creation: 01 Aug 2004
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labor; separability; mixture distributions; Peru;
Other versions of this item:
- Vakis, Renos & Sadoulet, Elisabeth & de Janvry, Alain & Cafiero, Carlo, 2004. "Testing for separability in household models with heterogeneous behavior : a mixture model approach," CUDARE Working Paper Series 0990, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
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