The impact of fiscal policies on agricultural household decisions
This paper provides a comparative static analysis of farm household's production, consumption, and labor market decisions under alternative tax policies. We explore the implications of non-separable household decisions caused by widespread non-participation in labor, land, financial and/or food markets, as is typical of low income economies. The analytical results indicate that when labor market imperfections occur, most tax-induced responses are ambiguous, mainly due to shadow price effects. This is particularly the case for the labor market and production responses to most tax tools under study, while a decreasing demand for consumption goods appears to be the result in several cases. Furthermore, tax-induced allocation effects may differ between the non-separable and the separable model versions, indicating the potential impact of labor market constraints on farm household responses to tax policies. In particular, standard taxes as well as a land tax may imply production adjustments in the case of non-separability.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
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.:
- Benjamin, Dwayne, 1992. "Household Composition, Labor Markets, and Labor Demand: Testing for Separation in Agricultural Household Models," Econometrica, Econometric Society, vol. 60(2), pages 287-322, March.
- Knud Jørgen Munk, 1980. "Optimal Taxation with some Non-Taxable Commodities," Review of Economic Studies, Oxford University Press, vol. 47(4), pages 755-765.
- Lau, Lawrence J., 1978. "Applications of Profit Functions," Histoy of Economic Thought Chapters, in: Fuss, Melvyn & McFadden, Daniel (ed.), Production Economics: A Dual Approach to Theory and Applications, volume 1, chapter 3 McMaster University Archive for the History of Economic Thought.
- Hans Löfgren & Sherman Robinson, 1999. "Nonseparable Farm Household Decisions in a Computable General Equilibrium Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(3), pages 663-670.
- Ahmad,Etisham & Stern,Nicholas, 1991.
"The Theory and Practice of Tax Reform in Developing Countries,"
Cambridge University Press, number 9780521265638, December.
- Ahmad,Etisham & Stern,Nicholas, 1991. "The Theory and Practice of Tax Reform in Developing Countries," Cambridge Books, Cambridge University Press, number 9780521397421, December.
- Gordon, Roger & Li, Wei, 2009.
"Tax structures in developing countries: Many puzzles and a possible explanation,"
Journal of Public Economics,
Elsevier, vol. 93(7-8), pages 855-866, August.
- Roger Gordon & Wei Li, 2005. "Tax Structure in Developing Countries: Many Puzzles and a Possible Explanation," NBER Working Papers 11267, National Bureau of Economic Research, Inc.
- Skoufias, Emmanuel, 1993.
"Labor market opportunities and intrafamily time allocation in rural households in South Asia,"
Journal of Development Economics,
Elsevier, vol. 40(2), pages 277-310, April.
- Skoufias, E., 1989. "Labor Market Opportunities And Interafamily Time Allocation In Rural Households In South Asia," Papers 3-90-2, Pennsylvania State - Department of Economics.
- Awudu Abdulai & Christopher L. Delgado, 1999. "Determinants of Nonfarm Earnings of Farm-Based Husbands and Wives in Northern Ghana," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(1), pages 117-130.
- de Janvry, Alain & Fafchamps, Marcel & Sadoulet, Elisabeth, 1991. "Peasant Household Behaviour with Missing Markets: Some Paradoxes Explained," Economic Journal, Royal Economic Society, vol. 101(409), pages 1400-417, November.
- Khan, Mahmood Hasan, 2001. "Agricultural taxation in developing countries: a survey of issues and policy," Agricultural Economics, Blackwell, vol. 24(3), pages 315-328, March.
- Skinner, Jonathan, 1991. "Prospects for Agricultural Land Taxation in Developing Countries," World Bank Economic Review, World Bank Group, vol. 5(3), pages 493-511, September.
- Tadashi Sonoda & Yoshihiro Maruyama, 1999. "Effects of the Internal Wage on Output Supply: A Structural Estimation for Japanese Rice Farmers," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(1), pages 131-143.
- Mohan Rao, J., 1989. "Taxing agriculture: Instruments and incidence," World Development, Elsevier, vol. 17(6), pages 809-823, June.
- M. Shahe Emran & Joseph E. Stiglitz, 2002.
"On Selective Indirect Tax Reform in Developing Countries,"
- Emran, M. Shahe & Stiglitz, Joseph E., 2005. "On selective indirect tax reform in developing countries," Journal of Public Economics, Elsevier, vol. 89(4), pages 599-623, April.
- Khan, Mahmood Hasan, 2001. "Agricultural taxation in developing countries: a survey of issues and policy," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 24(3), March.
- Hanan G. Jacoby, 1993. "Shadow Wages and Peasant Family Labour Supply: An Econometric Application to the Peruvian Sierra," Review of Economic Studies, Oxford University Press, vol. 60(4), pages 903-921.
- J. E. Stiglitz & P. Dasgupta, 1971.
"Differential Taxation, Public Goods, and Economic Efficiency,"
Review of Economic Studies,
Oxford University Press, vol. 38(2), pages 151-174.
- Joseph E. Stiglitz & Partha Dasgupta, 1970. "Differential Taxation, Public Goods, and Economic Efficiency," Cowles Foundation Discussion Papers 299, Cowles Foundation for Research in Economics, Yale University.
- Lopez, Ramon E., 1984. "Estimating labor supply and production decisions of self-employed farm producers," European Economic Review, Elsevier, vol. 24(1), pages 61-82.
- Deolalikar, Anil B & Vijverberg, Wim P M, 1987. "A Test of Heterogeneity of Family and Hired Labour in Asian Agriculture," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 49(3), pages 291-305, August.
- Nigel Key & Elisabeth Sadoulet & Alain De Janvry, 2000. "Transactions Costs and Agricultural Household Supply Response," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 245-259.
- Michael R. Carter & Yang Yao, 2002. "Local versus Global Separability in Agricultural Household Models: The Factor Price Equalization Effect of Land Transfer Rights," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(3), pages 702-715.
- Burgess, Robin & Stern, Nicholas, 1993. "Taxation and Development," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 762-830, June.
When requesting a correction, please mention this item's handle: RePEc:eee:ecmode:v:29:y:2012:i:2:p:166-177. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.