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Farmers' time allocation between farm work and off-farm work and the importance of unobserved group effects: evidence from Israeli cooperatives

  • Kimhi, Ayal

Agricultural cooperatives differ in many attributes which affect members' farm and off-farm earnings in different ways. As a result, time allocation patterns between farm work and off-farm work will vary significantly across cooperatives. Participation equations in farm work and off-farm work of farmers who are members of Israeli moshavim are estimated jointly, including a cooperative-specific factor in each equation. The fixed effects are found to be significant and important, but can be only partly explained by observed cooperative attributes. This provides another support to the Monte Carlo results of Borjas and Sueyoshi, that controlling for group effects is superior to alternative models. The results also imply that unobserved factors have considerable effects on farmers' time allocation, and hence should be controlled for whenever possible.

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File URL: http://www.sciencedirect.com/science/article/B6T3V-3W313JB-6/2/ed7eec74b5a6d5505691612468ea93c1
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Article provided by Blackwell in its journal Agricultural Economics.

Volume (Year): 14 (1996)
Issue (Month): 2 (July)
Pages: 135-142

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Handle: RePEc:eee:agecon:v:14:y:1996:i:2:p:135-142
Contact details of provider: Web page: http://www.blackwell-synergy.com/loi/agec

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  1. Tokle, J. G. & Huffman, Wallace, 1991. "Local Economic Conditions and Wage Labor Decisions of Farm and Rural Nonfarm Couples," Staff General Research Papers 10988, Iowa State University, Department of Economics.
  2. D. M. Shucksmith & R. Smith, 1991. "Farm Household Strategies And Pluriactivity In Upland Scotland," Journal of Agricultural Economics, Wiley Blackwell, vol. 42(3), pages 340-353.
  3. Reuben Gronau, 1976. "Leisure, Home Production and Work--The Theory of The Allocation of Time Revisited," NBER Working Papers 0137, National Bureau of Economic Research, Inc.
  4. Huffman, Wallace, 1980. "Farm and Off-Farm Work Decisions: The Role of Human Capital," Staff General Research Papers 10973, Iowa State University, Department of Economics.
  5. Haruvi, Nava & Kislev, Yoav, 1984. "Cooperation in the Moshav," Journal of Comparative Economics, Elsevier, vol. 8(1), pages 54-73, March.
  6. George J. Borjas & Glenn T. Sueyoshi, 1993. "A Two-Stage Estimator for Probit Models with Structural Group Effects," NBER Technical Working Papers 0146, National Bureau of Economic Research, Inc.
  7. A. Kimhi, 1994. "Participation Of Farm Owners In Farm And Off-Farm Work Including The Option Of Full-Time Off-Farm Work," Journal of Agricultural Economics, Wiley Blackwell, vol. 45(2), pages 232-239.
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