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Probabilistic Modelling of the Joint Labour Decisions of Husband and Wife in Farm Households

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  • Bjornsen, Hild-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.

Suggested Citation

  • Bjornsen, Hild-Marte, 2002. "Probabilistic Modelling of the Joint Labour Decisions of Husband and Wife in Farm Households," Workshop on the Farm Household-Firm Unit: Its Importance in Agriculture and Implications for Statistics, April 12-13,2002, Wye Campus, Imperial College 15717, International Agricultural Policy Reform and Adjustment Project (IAPRAP).
    • Handle: RePEc:ags:iapr02:15717
    DOI: 10.22004/ag.econ.15717
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    References listed on IDEAS

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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 471-480, August.
    2. Huffman, Wallace E. & El-Osta, Hisham, 1997. "Off-Farm Work Participation, Off-Farm Labor Supply and On-Farm Labor Demand of U.S. Farm Operators," ISU General Staff Papers 199712010800001290, Iowa State University, Department of Economics.
    3. Hanemann, W Michael, 1984. "Discrete-Continuous Models of Consumer Demand," Econometrica, Econometric Society, vol. 52(3), pages 541-561, May.
    4. Brian W. Gould & William E. Saupe, 1989. "Off-Farm Labor Market Entry and Exit," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(4), pages 960-969.
    5. 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.
    6. Gourieroux,Christian, 2000. "Econometrics of Qualitative Dependent Variables," Cambridge Books, Cambridge University Press, number 9780521589857, January.
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