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Testing dependence using copulas: the case of dual employment

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  • Jeremy Michael D'Antoni
  • Ashok Kumar Mishra

Abstract

Copulas are functions that parameterize the dependence between univariate marginal distribution functions to form a joint distribution function. Copulas provide a consistent procedure for testing dependence and guiding the choice of empirical model. In this study we use copulas to measure the dependence in labour supply by married farm couples. Using individual data our research provides an easy method that researchers can use to address the issues of dependence. The method outlined here reduces computational time and provides a more efficient method of testing dependence early in the investigative process. Unlike previous studies findings from this study show with robustness that labour supply decision of married farm couples is best modelled jointly.

Suggested Citation

  • Jeremy Michael D'Antoni & Ashok Kumar Mishra, 2012. "Testing dependence using copulas: the case of dual employment," Applied Economics Letters, Taylor & Francis Journals, vol. 19(13), pages 1265-1269, September.
    • Handle: RePEc:taf:apeclt:v:19:y:2012:i:13:p:1265-1269
    DOI: 10.1080/13504851.2011.619483
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    References listed on IDEAS

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    1. Catherine Benjamin & Ayal Kimhi, 2006. "Farm work, off-farm work, and hired farm labour: estimating a discrete-choice model of French farm couples' labour decisions," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 33(2), pages 149-171, June.
    2. Ashok K. Mishra & Barry K. Goodwin, 1997. "Farm Income Variability and the Supply of Off-Farm Labor," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 880-887.
    3. Daniel A. Lass & Conrado M. Gempesaw II, 1992. "The Supply of Off-Farm Labor: A Random Coefficients Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(2), pages 400-411.
    4. Singh, Inderjit & Squire, Lyn & Strauss, John, 1986. "A Survey of Agricultural Household Models: Recent Findings and Policy Implications," The World Bank Economic Review, World Bank, vol. 1(1), pages 149-179, September.
    5. Hisham El-Osta & Ashok Mishra & Mary Ahearn, 2004. "Labor Supply by Farm Operators Under “Decoupled” Farm Program Payments," Review of Economics of the Household, Springer, vol. 2(4), pages 367-385, August.
    6. Benjamin, Catherine & Kimhi, Ayal, 2003. "Farm Work, Off-Farm Work, And Hired Farm Labor: Estimating A Discrete-Choice Model Of French Farm Couples' Labor Decisions," Discussion Papers 14990, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
    7. Joe Dewbre, 2006. "The Impact of Coupled and Decoupled Government Subsidies on Off-Farm Labor Participation of U.S. Farm Operators," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(2), pages 393-408.
    8. Mishra, Ashok K. & El-Osta, Hisham S. & Morehart, Mitchell J. & Johnson, James D. & Hopkins, Jeffrey W., 2002. "Income, Wealth, And The Economic Well-Being Of Farm Households," Agricultural Economic Reports 33967, United States Department of Agriculture, Economic Research Service.
    9. Casey Quinn, 2007. "Improving precision in cost-effectiveness analysis using copulas," Health, Econometrics and Data Group (HEDG) Working Papers 07/23, HEDG, c/o Department of Economics, University of York.
    10. Catherine Benjamin & Alessandro Corsi & Hervé Guyomard, 1996. "Modelling labour decisions of French agricultural households," Post-Print hal-01931609, HAL.
    11. Barry K. Goodwin & Ashok K. Mishra, 2004. "Farming Efficiency and the Determinants of Multiple Job Holding by Farm Operators," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(3), pages 722-729.
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    1. Koirala, Krishna H. & Mishra, Ashok K. & D'Antoni, Jeremy M. & Mehlhorn, Joey E., 2015. "Energy prices and agricultural commodity prices: Testing correlation using copulas method," Energy, Elsevier, vol. 81(C), pages 430-436.
    2. Miller, Cristina D. M. & Mishra, Ashok K. & Villacis, Alexis H., 2023. "Employer-Sponsored Health Insurance Coverage, Government Payments and Labor Allocation: The Case of US Farm-Operator Households," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 48(1), January.

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