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Is multivariate probit really useless in analysing off-farm labour participation of farm couples? A note

Author

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  • Alessandro Corsi

    ()

  • Cristina Salvioni

Abstract

In a recent paper, Benjamin and Kimhi (2006) argued that using multivariate probit for analysing off-farm participation of farm couples suffers from a theoretical inconsistency. This note tries to clarify this issue, and illustrates the joint participation rules based on reservation wages of household members. The reservation wages of each household member is contingent on the participation status of the other member. Hence, participation rules have to keep into account the joint participation probabilities of the couple.

Suggested Citation

  • Alessandro Corsi & Cristina Salvioni, 2010. "Is multivariate probit really useless in analysing off-farm labour participation of farm couples? A note," CHILD Working Papers wp03_10, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
  • Handle: RePEc:wpc:wplist:wp03_10
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    File URL: http://www.child.carloalberto.org/images/wp/child03_2010.pdf
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    Keywords

    off-farm labour participation; farm household; multivariate probit;

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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