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Testing for separability in household models with heterogeneous behavior : a mixture model approach

  • Vakis, Renos
  • Sadoulet, Elisabeth

    ()

    (University of California, Berkeley. Dept of agricultural and resource economics and policy)

  • de Janvry, Alain

    ()

    (University of California, Berkeley. Dept of agricultural and resource economics and policy)

  • Cafiero, Carlo

Knowing whether a household behaves according to separability or non-separability is needed for the correct modeling of production decisions. We propose a superior test to those found in the literature on separability by using a mixture distribution approach to estimate the probability that a farm household behaves according to non-separability, and test that the determinants of consumption affect production decisions for households categorized as non-separable. With non-separability attributed to labor market constraints, the switcher equation shows that Peruvian farm households that are indigenous and young, with low levels of education, and lack of local employment opportunities are more likely to be constrained on the labor market.

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File URL: http://repositories.cdlib.org/are_ucb/990
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Paper provided by University of California at Berkeley, Department of Agricultural and Resource Economics and Policy in its series CUDARE Working Paper Series with number 0990.

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Length: 19 pages
Date of creation: 2004
Date of revision:
Handle: RePEc:are:cudare:0990
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  1. Kiefer, Nicholas M, 1978. "Discrete Parameter Variation: Efficient Estimation of a Switching Regression Model," Econometrica, Econometric Society, vol. 46(2), pages 427-34, March.
  2. Eswaran, Mukesh & Kotwal, Ashok, 1986. "Access to Capital and Agrarian Production Organisation," Economic Journal, Royal Economic Society, vol. 96(382), pages 482-98, June.
  3. Grimard, Franque, 2000. "Rural Labor Markets, Household Composition, and Rainfall in Cote d'Ivoire," Review of Development Economics, Wiley Blackwell, vol. 4(1), pages 70-86, February.
  4. 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.
  5. Jacoby, H.G., 1990. "Shadow Wages And Peasant Family Labor Supply; An Econometric Application To The Peruvian Sierra," Papers 73, World Bank - Living Standards Measurement.
  6. MICHAEL R. CARTER & Pedro Olinto, 2000. "Getting Institutions 'Right' for Whom: Credit Constraints and the Impact of Property Rights on the Quantity and Compostiton of Investment," Wisconsin-Madison Agricultural and Applied Economics Staff Papers 433, Wisconsin-Madison Agricultural and Applied Economics Department.
  7. Anjana Bhattacharyya & Subal C. Kumbhakar, 1997. "Market Imperfections and Output Loss in the Presence of Expenditure Constraint: A Generalized Shadow Price Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 860-871.
  8. 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.
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