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Class position and Economic Behavior in a Tunisian Village: Selective Separability in a Multi-Factor Household Model

Author

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  • Jean-Louis ARCAND

    ()

  • CONNING
  • ETHIER

Abstract

The purposes of this paper are twofold. First, we examine, using a unique dataset collected in the Tunisian village of El Oulja, what might be termed "all or nothing" separability (Benjamin, 1992) by testing, while controling for plot characteristics (Udry, 1996), the proposition that farm input use is independent of household characteristics. Second, we test for separability in the context of a model of class structure based on the seminal work of Eswaran and Kotwal (1986). In order to do so, we construct a model of class structure which offers an appealing representation of the typology of household types in the village when they are classified in terms of (i) their hiring in of wage labor, and (ii) their hiring out of family labor. We use a two-stage estimation technique in which we first estimate the probability of class membership as a function of household characteristics using discrete choice methods. In the second stage we estimate labor intensity per hectare using a Lee-Heckman procedure in which the inverse-Mill ratio from the first stage is included as an additional explanatory variable. As with the case of the test for "all or nothing" separability, the test for selective separability involves exclusion restrictions on household characteristics, although these are now conditional on class membership. Our empirical results strongly support the selective separability hypothesis as well as our theoretical model: most of the "action" in terms of non-separability stems, as one would expect from the model, from the class of "self-cultivators" who neither hire in wage labor nor hire out family labor. Our paper extends the work of DeJanvry, Sadoulet and Benjamin (1996) on Mexican ejidatarios to plot- as opposed to household-level estimation. Moreover, our paper provides an elaboration on and an empirical bridge to theoretical models, such as Roemer (1982), Eswaran and Kotwal (1986), and Carter and Zimmerman (1995) which examine how credit constraints and imperfections on factor markets shape the class structure of the agrarian economy. The implications and scope for government intervention in the context of market imperfections are also examined.

Suggested Citation

  • Jean-Louis ARCAND & CONNING & ETHIER, 1999. "Class position and Economic Behavior in a Tunisian Village: Selective Separability in a Multi-Factor Household Model," Working Papers 199911, CERDI.
  • Handle: RePEc:cdi:wpaper:110
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    File URL: http://publi.cerdi.org/ed/1999/1999.11.pdf
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    References listed on IDEAS

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    1. Pant, Chandrashekar, 1983. "Tenancy and family resources : A model and some empirical analysis," Journal of Development Economics, Elsevier, pages 27-39.
    2. Frisvold, George B., 1994. "Does supervision matter? Some hypothesis tests using Indian farm-level data," Journal of Development Economics, Elsevier, pages 217-238.
    3. Eswaran, Mukesh & Kotwal, Ashok, 1986. "Access to Capital and Agrarian Production Organisation," Economic Journal, Royal Economic Society, vol. 96(382), pages 482-498, June.
    4. Jean-Louis ARCAND & AI & ETHIER, 2005. "Moral Hazard and Marshallian Inefficiency:Evidence from Tunisia," Working Papers 200534, CERDI.
    5. Benjamin, Dwayne, 1995. "Can unobserved land quality explain the inverse productivity relationship?," Journal of Development Economics, Elsevier, pages 51-84.
    6. Mercenier, J. & Yeldan, E., 1996. "How Prescribed Policy Can Mislead when Data Are Defective: a Follow-Up to Srinivasan (1994) Using General Equilibrium," Cahiers de recherche 9606, Universite de Montreal, Departement de sciences economiques.
    7. Rosenzweig, Mark R. & Pitt, Mark M., 1984. "Agricultural Prices, Food Consumption and the Health and Productivity of Farmers," Bulletins 7471, University of Minnesota, Economic Development Center.
    8. Mark R. Rosenzweig, 1980. "Neoclassical Theory and the Optimizing Peasant: An Econometric Analysis of Market Family Labor Supply in a Developing Country," The Quarterly Journal of Economics, Oxford University Press, pages 31-55.
    9. 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.
    10. Arcand, Jean-Louis & Ai, Chunrong & Ethier, Francois, 2007. "Moral hazard and Marshallian inefficiency: Evidence from Tunisia," Journal of Development Economics, Elsevier, pages 411-445.
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