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Probabilistic modelling of the joint labour decisions of husband and wife in farm households

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Bjornsen, Marte ()
Abstract

When working with micro data one sometimes encounters situations involving qualitative choices in addition to the continuous choices that are the traditional focus of empirical analysis. One such situation arises when we study the increase in multiple job-holdings among farm operators in western economies. In these analyses we are both interested in the qualitative choice of entering the off-farm labour market and the continuous choice of determining labour supply in all occupations. This paper presents a unified framework for formulating such a discrete/continuous choices that include randomness within the decision-making process. We consider the joint labour decisions of operator and spouse through an agricultural household model that combines the agricultural production, consumption, and labour supply decisions in a single framework. We develop a probabilistic decision rule for participating in off-farm work and derive the demand functions in farm production and labour supply functions in off-farm sector.

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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa02p513.

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Date of creation: Aug 2002
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Handle: RePEc:wiw:wiwrsa:ersa02p513

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  1. Huffman, Wallace E & Lange, Mark D, 1989. "Off-Farm Work Decisions of Husbands and Wives: Joint Decision Making," The Review of Economics and Statistics, MIT Press, vol. 71(3), pages 471-80, August. [Downloadable!] (restricted)
  2. Hanemann, W Michael, 1984. "Discrete-Continuous Models of Consumer Demand," Econometrica, Econometric Society, vol. 52(3), pages 541-61, May. [Downloadable!] (restricted)
  3. Weersink, Alfons & Nicholson, Charles & Weerhewa, Jeeveka, 1998. "Multiple job holdings among dairy farm families in New York and Ontario," Agricultural Economics, Blackwell, vol. 18(2), pages 127-143, March. [Downloadable!] (restricted)
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