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The heterogeneity of family and hired labor in agricultural production: A test using district-level data from India
... Prior research has attempted to measure the elasticity of substitution between hired and family labor. The studies have largely been limited to estimation of production functions for farm output, generally using a Cobb-Douglas functional form as in Deolalikar andVijverberg (1983, 1987). These two studies analyzed the substitutability of farm labor in India and Malaysia. ...
... These two studies analyzed the substitutability of farm labor in India and Malaysia. Deolalikar and Vijverberg (1983) estimated a Cobb-Douglas production function for farm outputs as a function of farm labor and other farm inputs. The farm labor input was then represented by a second production function nested within the farm production function. ...
... This assumption implies that each additional unit of family and hired labor has an identical impact on production, costs, and profits. This notion continues in more recent research (Blanc, Cahuzac, and Elyakime, 2008a) with the added acknowledgment that family and hired labor may impact production processes differently (Deolalikar andVijverberg, 1983, 1987;Huffman, 1976). ...
The substitution of capital for labor and new labor-saving technologies has reduced the labor required for farming, yet many farms today depend on hired labor in some form. Common in the literature is the assumption of perfectly substitutable farm labor. This has implications for the operator’s off-farm labor decision. Intuitively, different forms of farm labor have different impacts on production. We use the Agricultural and Resource Management Survey to estimate the elasticity of substitution between hired and family labor. The results provide little evidence to support the popular homogeneity assumption and find labor can be unitary and complimentary under certain scenarios.
... Prior research in this area has been limited to estimation of production functions for farm output, generally of Cobb-Douglas form (Deolalikar and Vijverberg 1982;1978). Nested in these models are production functions for farm labor. ...
... Additionally, prior research has focused on testing the homogeneity of farm labor through the direct estimation of primal functions rather than a dual approach. Vijverberg (1982 and are two studies analyzing the homogeneity in farm labor in India and Asia, respectively. Deolalikar and Vijverberg (1982) estimated a Cobb-Douglas production function for farm outputs as a function of farm labor and other farm inputs. ...
... Vijverberg (1982 and are two studies analyzing the homogeneity in farm labor in India and Asia, respectively. Deolalikar and Vijverberg (1982) estimated a Cobb-Douglas production function for farm outputs as a function of farm labor and other farm inputs. The farm labor input is represented by a second production function nested with farm production function. ...
The assumption of homogeneity between family and hired farm labor is common in farm labor research. Controlling for region and farm size, this study employs a seemingly unrelated regression analysis to jointly estimate a translog cost function and factor cost shares to determine the elasticity of substitution between hired and family farm labor. The results show an evidence of heterogeneity of farm labor in both cash grain and hog farms in the U.S. There is further evidence that the elasticity of substitution is unitary and the cost minimizing ratio of hired and family labor is not independent of time. Regional factors were found to have little effect on the substitutability of farm labor, whereas farm size was found to have a significant influence on the relationship between hired and family labor.
... The hypothesis that family labor may affect hired labor productivity was not tested empirically to date. There are a few estimates which maintain a distinction between family labor and hired labor [Desal and Mazumdar (1970), Bardhan (1973), Brown and Salkin (1974), Rao and Chotigeat (1981), Deolalikar and Vijverberg (1982)]. Results are mixed, in part due to differing specifications. ...
... Results are mixed, in part due to differing specifications. 3One of the specifications of effective labor with which Deolalikar and Vijverberg (1982) experimented is equivalent to eq. (2) under the assumption that F/A is approximately constant across farms. Their estimated coefficients are ~= 0.758, e(F/A)= 0.242. ...
The paper shows that if the performance of hired farmhands is affected by supervision from family members, and if the availability of credit is dependent on the amount of land owned, then a systematic (positive or negative) relationship between per-acre yields and farm size will prevail. A model with no supervision effects on labor productivity would predict that yields are unaffected by farm size. The paper also investigates the relation between land utilization and owned holding size when land rental possibilities are limited. Results are shown to be compatible with various observed patterns in LDCs.
... First, labour is gender specialised implying that labour is heterogeneous and consequently, under this assumption the model is non-separable by construction. We do not allow for hired labour, such as in Deolalikar and Vijverberg (1987) but this is likely to be of minor importance since there are only very rare occasions where hired labour is utilised. We extend the non separability with an additional constraint that makes households unable to adjust their labour between activities at the margin. ...
... Whenever we have needed logarithms, we have transformed the variables accordingly but in some observations, we noted that inputs were stated as zero and in order not to loose too many observations, we added one to the value. This method is used elsewhere in studies such as Deolalikar and Vijverberg (1987), Jacoby (1993) and Skoufias (1994). The variable with most frequent zeros is pesticide use. ...
Indian agriculture today is under a large crisis. An average farmer household's returns from cultivation would be around one thousand rupees per month. The incomes are inadequate and the farmer is not in a position to address the multitude of risks: weather, credit, market and technology among others. Social responsibility of education, healthcare and marriage instead of being normal activities add to the burden. All these would even put the semi-medium farmer under a state of transient poverty. The state of the vast majority of small and marginal farmers and agricultural labourers is worse off. An extreme form of response to this crisis is the increasing incidence of farmers' suicides. In such situations, employment programmes can provide some succour to the agricultural labourers and also perhaps to the marginal and small farmers. The least that one can expect from such programmes is rent-seeking. Some recent evidences indicate that one can develop institutions to address this. It is this that gives a glimmer of hope in the larger story of distress, despair and death. Incidentally, this paper provides some estimates from National Sample Survey (NSS) region wise information on returns to cultivation and on some aspects of farmers' indebtedness based on the 33rd schedule 59th round survey of 2003. It provides suicide mortality rate for farmers, non-farmers and age-adjusted population across states of India from 1995-2004.
... The study adds its value in demonstrating the failure of assuming perfect substitution between permanent and seasonal farm workers, as found in many other settings (Blanc et al. 2008;Brümmer 2001;Deolalikar & Vijverberg 1983), while it supports a notion that the higher productivity might be associated with the lower amount of family labor (Goodwin & Mishra 2004). ...
In Uzbekistan, per capita national supply of fruit and vegetables exceeds the daily recommended amount of 400 grams by more than two times. Nevertheless, individual-level intakes remain inadequate due to the strong seasonal pattern, which may lead to health and nutrition problems. Thus, this thesis identifies challenges and drivers of fruit and vegetable production, as well as determinants and patterns of fruit and vegetable consumption. In addition, this study aims to analyze diet quality via the dietary diversity concept and eventually aid in improving nutritional outcomes of the Uzbek population. The work is motivated by the need to provide evidence-based research findings to the national decision-makers in the areas of agriculture, nutrition, and health, thereby supporting them in developing appropriate policies.
This study’s focus lies in Tashkent province of Uzbekistan. All analyses are based on the primary data purposely collected in the research area among various target groups. Functional analysis of supply chain showed that given the state-controlled nature of the horticultural sector and market imperfections, horticultural growers have low flexibility in producing and marketing. Based on the 2014 Fruit and vegetable production survey (N=100), the results of the Cobb-Douglas agricultural production function confirm the predominant role of labor, capital and land quality to horticultural output growth in Uzbekistan.
According to the panel estimation, using the 2014 & 2015 Food consumption survey (N=931), individual-level fruit and vegetable intake rises with increasing income, better food and nutrition knowledge and bigger household size, while it falls with increasing age and market prices. The effects of prices and income were found to be stronger for infants compared to other age groups. While high income elasticity of demand is observed in children for selected nutrients derived from fruit and vegetable consumption, food knowledge positively affects nutrient intake for the whole population. Relatively high consumption of fruit and vegetables in absolute terms in summer can be considered as the reason for adequate vitamin A, vitamin C and iron intakes.
The Uzbek diet consists of energy-dense food and lacks fruit and vegetables, especially in winter, and there is a low dietary diversity with the clear seasonal pattern. In neither of the seasons, are much vitamin-A-rich dark green leafy vegetables consumed.
Poisson regression models showed that in Uzbek children (except infants) and adults, socioeconomic status was found to positively affect dietary diversity. Age increases dietary diversity for all population groups, except for adult men. The positive association between food knowledge and dietary diversity, found in adults, suggests the importance of raising awareness on healthy diet. Home availability of fruit and vegetables increases dietary diversity in children, which is confirmed by the positive association between rural dummy and diet diversity.
Finally, the tabular analysis showed that a diversified diet is inversely associated with weight gain and hypertension in Uzbek adults, while for children there was a positive correlation between dietary diversity and height-for-age z-score.
Among the economic levers, there is a need for a more liberalized trade policy, improved access to finance, the abandonment of the state production plan system as well as providing incentives for low income families. At the disposal of the Government, social levers should include the development of agricultural professional training systems and population-based public campaigns. While less labor intensive agricultural innovations are required, it is also necessary to consider policies, which aim at smoothing seasonality in horticultural supply, such as finding alternative ways to provision a stable energy supply in greenhouses, extending the duration of harvest and reducing post-harvest losses. Special attention must be given to improving transparency and intolerance to abuse of power.
... We find only a handful of such studies, despite an extensive theoretical literature on supervising and designing incentives for hired labor on and off the farm (Hölmstrom, 1979;Key & Runsten, 1999). Deolalikar and Vijverberg (1983;1987) find mixed evidence as to whether family and hired laborers are perfect substitutes for different Asian countries. Using data of Indonesian farmers, Benjamin (1992) tests whether family and hired laborers are equally efficient and fails to reject the null hypothesis. ...
Smallholder farms continue to play a prominent role in many developing countries. A substantial debate has emerged regarding the future role of smallholder farms as a means to lift rural households out of poverty and contribute to food security as part of modern agricultural value chains. We build a conceptual model to compare household income and total food output under smallholder production versus a hypothetical setting wherein households cease engaging as farm owner‐operators, but supply land and labor to consolidated commercial farms. Based on the empirical literature, we calibrate the model to quantify the advantages in acquiring working capital and output marketing that can plausibly accrue to large‐scale farming operations and offset any labor efficiency decrement compared to smallholder farms. Results show that households can earn more from renting out land and labor into competitive factor markets for a wide range of plausible market conditions. The higher the price premium commanded by and less the loss in labor efficiency on large farms, and the tighter the credit constraints on smallholders, the greater is the income advantage from supplying inputs to large farms over operating small farms. An output advantage also accrues to large farms under similar conditions.
... We find only a handful of such studies, despite an extensive theoretical literature on supervising and designing incentives for hired labor on and off the farm (Hölmstrom, 1979;Key and Runsten, 1999). Deolalikar and Vijverberg (1983;1987) find mixed evidence as to whether family and hired laborers are perfect substitutes for different Asian countries. Using data of 6 Price discounts due to buyer market power are determined jointly by the extent of buyers' power and the inelasticity of farmers' supply functions. ...
... Specifically, migration entails a loss of family labour that can negatively affect agricultural activity if it is not compensated by hired labour (Rozelle et al., 1999). Moreover, as suggested by Deolalikar and Vijverberg (1983), hired and family labour may not be perfect substitutes because of the ease of monitoring and decentralizing work differ for these two sources of labour. ...
Low productivity is one of most issue of agricultural development in SSA countries with consequences on household poverty. A first factor of low agricultural productivity is the limited access to traditional inputs or environmental context constraints. However, human capital has been recognized as a determinant of agricultural productivity since a wide literature. Therefore, the aim of this paper is to analyse the impact of farmer's human capital on agricultural productivity taking account of agricultural heterogeneity. We estimated the average production function using LSMS-ISA dataset of Malawi. We analysed both the agricultural output and a productivity index, called yield-gap which measures the distance between the yield of a farmer and the top performers farmers. Furthermore, we analysed six crops to capture typical heterogeneity in SSA agriculture, namely, staple-crop vs. cash-crop and traditional vs. modern systems. Results showed that human capital positively affected agricultural output and productivity explaining most of the lower agricultural performance. JEL Classification: O13, O15, Q12, O55
... It could be the detected lower productivity associated with hired family labor that causes this response. Previous studies found that the productivity of hired non-family labor is much higher than that of family labor (Nath, 1974;Deolalikar and Vijverberg, 1983;Khandker, 1988). In the second stage "action function", perceived pressure stands out to be the only significant factor that explains farm managers' actions taken to improve farm overall performance (through Mills Lambda, α<0.05). ...
This paper examines factors that affect agribusiness management behavior of a sample of dairy, equine, beef cattle, and hog farms in New York State to understand how they survive the ongoing economic hardship. Using a conceptual framework and a Heckman Selection model, this study analyzes the impact of managers' perceived pressure from the unfavorable economy, their personal traits and their self-assessed managerial skills on farm adaptation strategies and their help-seeking activities to agribusiness assistance programs. The analysis of self-assessed management skills led to three distinct management styles, labeled as production experts, marketing experts, and finance experts. The results demonstrate that managers who held a leadership position in agricultural organizations are more likely to feel pressure. This pressure negatively affects management actions to adapt the farm to the adverse economy. Our results suggest that the New York agricultural policy planners should address this negative impact of the current economic difficulties on farming practices to effectively support the economic health of its agricultural industry.
... To avoid these complications, it is common to assume that farm-households produce for the marketplace as well as for their own consumption, and view the labor of family members as equivalent to labor hired from or supplied to the market; this homogeneity of output and labor input permits production and consumption decisions within the household to be sequentially optimized, and greatly simplifies empirical analysis of the behavior of farm-households [Singh, Squire and Strauss (1986)]. Hired and family labor may not be perfect substitutes for each other in all tasks, because the ease of monitoring and therefore decentralizing work may differ for these two types of labor [Deolalikar and Vijverberg (1983)]. While the family production-consumption model is attractive for the study of farm production of food staples, it seems less appropriate for the study of the production of untraded goods, such as children, the schooling of those children, and the health of family members [Rosenzweig and Schultz (1983)]. ...
This chapter focuses on schooling, as an investment with market returns is not intended to detract from the importance of education as a public good and as a source of consumption benefits, but rather to review how economic concepts and statistical methods have recently progressed in quantifying the roles of education in economic development. This chapter surveys a small part of the extensive literature on the linkages among education, productivity, and development, and assesses several areas where concerted research might clarify important issues and potentially change policies. This chapter presents an economic interpretation of this educational explosion. Most of the growth in public expenditures on education is attributed to increases in growth of real income per adult. The chapter describes the expansion of the world's educational system both in terms of its inputs of public and private resources and its output of students, and then estimates how income, price, and population constraints appear to govern this process. The chapter presents a contrast on causal frameworks proposed to explain the relationship between education and productivity, and discusses sources of data to measure the relationship and discriminate among causal interpretations. The chapter reviews evidence on the market returns to schooling measured for entrepreneurs and employees, men and women, and migrants and nonmigrants. The chapter also presents the evidence of schooling's effects on nonmarket production. The chapter discusses the policy issues for development that arise from the apparent effects of education on economic productivity and the mechanisms used to finance and manage the educational system.
... Moreover, observed heterogeneity of on-farm labor might also affect labor demand. For example, some studies (Benjamin 1992; Deolalikar and Vijverberg 1983, 1987; Frisvold 1994) point out that different productivity might be observed for hired and family farm labor. We assume that farm-specific productivity also varies across hired workers. ...
We develop a farm household model to analyze price responses of farm households. This model incorporates various types of
transaction costs as well as labor heterogeneity. Nonproportional variable transaction costs or labor heterogeneity imply
that production and consumption decisions become nonseparable, even when the household buys or sells labor. An empirical model
is estimated using data from Midwest Poland. The results show that nonproportional variable transaction costs and labor heterogeneity
significantly influence household behavior. Not all price elasticities, however, change significantly if these are neglected.
... The justification for the functional form considered in Battese, Coelli and Colby (1989) is based on the work of Bardhan (1973) and Deolalikar and Vijverberg (1983) with ...
Frontier production functions are important for the prediction of technical efficiencies of individual firms in an industry. A stochastic frontier production function model for panel data is presented, for which the firm effects are an exponential function of time. The best predictor for the technical efficiency of an individual firm at a particular time period is presented for this time-varying model. An empirical example is presented using agricultural data for paddy farmers in a village in India.
... Early econometric studies of labour products assumed perfect substitutability between labour categories, see for example Lau, Lin and Yotopoulos (1978). In many cases, this is a sensible way to proceed, but as Deolalikar and Vijverberg (1987) showed, perfect substitutability is not always a valid assumption. They discovered that labour was heterogeneous and thus, there is a need to distinguish between hired and family labour. ...
Extra t.p. with thesis statement inserted. Thesis (doctoral)--Göteborgs universitet, 2002. Includes bibliographical references.
... In other words, when both the land and labor markets were modeled jointly, family farms appear to be efficiently allocating their own and hired labor (and land) in a manner that could not be statistically shown to be inefficient due to labor market or family imperfections (Seavy, 1987). Agricultural production functions estimated at the district level for India suggest that family and hired labor may exhibit different productivity and may deserve to be treated as separate inputs, although this has proven difficult given the extent of gender segregation of agricultural tasks (Deolalikar and Vijverberg, 1983;Laufer, 1985). ...
Time and value are related concepts that influence human behaviour. Although classical topics in human thinking throughout the ages, few environmental economic non-market valuation studies have attempted to link the two concepts. Economists have estimated non-market environmental values in monetary terms for over 30 years. This history of valuation provides an opportunity to compare value estimates and how valuation techniques have changed over time. This research aims to compare value estimates of benefits of a protected natural area. In 1978, Nadgee Nature Reserve on the far south coast of New South Wales was the focus of the first application of the contingent valuation method in Australia. This research aims to replicate that study using both the original 1978 contingent valuation method questionnaire and sampling technique, as well as state of the art non-market valuation tools. This replication will provide insights into the extent and direction of changes in environmental values over time. It will also highlight the impact on value estimates of methodological evolution. These insights will help make allocating resources more efficient.
A stochastic frontier production function with time‐varying technical efficiencies is estimated using panel data from ICRISAT's Village Level Studies in three Indian villages. Given the specifications of a linearized version of a Cobb–Douglas stochastic frontier production function with coefficients which are a linear function of time, the hypothesis that the traditional response function is an adequate representation of the data is accepted for only one of the three villages. The hypothesis of time‐invariant technical inefficiencies is not rejected for one of the two villages for which significant technical inefficiencies exist. The hypothesis of time‐invariant elasticities of the input variables is rejected for two of the three villages. Further, the hypothesis that hired and family labour are equally productive is accepted in only one of the three villages.
The technical efficiencies of individual farms exhibited considerable variation in the two villages with either time‐invariant or time‐varying technical efficiencies.
Within the framework of potential efforts and strategies to employment generation for young people in Africa in general and Ethiopia in particular, the agricultural sector is increasingly considered as an important sector and a valuable means for poverty reduction, the promotion of economic development, and youth's economic independence. Renewed hope is placed on the sector to offer sustainable livelihood prospects for the rural youth. Yet, the success and sustainability of the sector require a proper understanding of how households allocate youth labor time in the sector and whether agricultural labor supply is responsive to economic incentives such as shadow wages. Using gender- and age-specific plot-level panel data, we systematically analyze the impacts of shadow wages of each household member on youth agricultural labor supply across types of farms. The results indicate that agricultural shadow wages matter for the youth's labor supply in the sector, but the impact differs for male and female youth. We also show that trends and patterns of youth labor supply vary across gender and whether they work on their own farm, and so do their labor returns. The results are consistent after controlling for individual heterogeneity and instrumenting for possible endogeneity. Taking into account the intensity of youth's actual involvement in the family farm, own farm or off-farm work instead of their stated intentions, the results challenge the presumption that youth are abandoning agriculture, at least in agricultural potential areas of Ethiopia. Instead, the frequent narrative of youth disengaging from agriculture may be a result of methodological flaws or data limitations. The findings suggest that it is necessary to invest in agricultural development to enhance labor productivity and employability of young people in agriculture. The latest version of the article could be accessed at: https://doi.org/10.1108/S0147-912120200000048003
The majority of the youth in Ethiopia live in rural areas where agriculture is the main source of livelihood. Using gender- and age-specific values of agricultural labor return (shadow wages), we systematically analyse trends, patterns and prospects of youth’s labor supply in agriculture across space (farm locations). We also analyse whether the household male and female youth members’ agricultural labor supply is responsive to economic incentives. We investigate these using shadow wages estimation techniques applied to farm-household panel data collected during the 2010/11 and 2014/15 agricultural seasons. The results indicate that trends and patterns of the youth’s involvement in agriculture vary across gender and farm work locations, and so do their labor returns. Yet the on-farm participation for youth members is declining across time irrespective of gender, whilst their participation in off-farm activities is increasing. The findings also suggest that changes in agricultural shadow wages matter for the youth’s involvement in the sector, but their impact differs for male and female youth. The results are consistent after controlling for individual heterogeneity, sample selection and instrumenting for possible endogeneity. In addition, we find that youth’s intentions and actual engagement in agricultural production vary greatly. This suggests that the frequent narrative of youth disengaging from agriculture may be a result of methodological flaws or data limitations. Taking into account the intensity of the youth’s involvement in family farm, own farm and off-farm work, the results challenge the presumption that youth are abandoning agriculture, at least in agricultural potential areas of Ethiopia. Instead the youth’s involvement makes an important economic contribution to the operation of the family farm. Therefore, it is necessary to invest in agricultural development to enhance productivity and employment opportunities; and structural transformation that addresses the imperfections and rigidities in labor and other input markets to make agriculture more attractive to youth.
This paper addresses the question of substitutability and homogeneity of family and hired labour in agriculture of less developed economy. The paper uses individual farm-level data for 478 Indian farms to analyse (a) separability of the labour inputs, (b) elasticity of substitution between family labour and hired labour and (c) effective labour functions. The analysis is based on an ordinary least square (OLS) estimation of the translog production function with family and hired labour as two distinct inputs. Results of analysis show that family and hired labour in Indian agriculture are weakly separable from other inputs such as land and material inputs. These two labour inputs are, however, very close substitutes and they are equivalent in terms of efficiency. Thus family and hired labour in Indian agriculture should be considered as homogeneous inputs.
The article studies the influence on the labour force composition on the productivity of French fruit and vegetable farms. We use a panel drawn from the FADN data (1995-2006). We show that family is less productive than wage labour even when controlling for seasonal differences in labour productivity. Moreover, permanent wage labour turns out to be less productive than seasonal wage labour. We discuss the results by highlighting specific forms of seasonal wage labour.
This study analyzes the effects of transaction costs on the size of hazelnut farms in Turkey. The study finds that higher land slope and higher variance of rain, as transaction-cost-increasing natural effects, lead to smaller hazelnut land holdings. High slope and weather variation can increase the costs of monitoring the laborers, make moving inputs or output up and down harder, limit the use of machinery, and reduce contractual performance of labor contracts. For farm production functions, land is a complex input with measurable interactions with nature. Contrary to common production theory approaches that take natural properties of land as given, the study develops a production function that incorporates natural properties, such as, slope and rain variance. The study utilizes two separate data sets for the estimations. The first data set explores the characteristics of hazelnut farmers, while the second one analyzes the regional characteristics of hazelnut farms.
It is common practice to aggregate inputs prior to estimating the structure of production technology. It is of interest, therefore to have some idea of the impact of such aggregation on the resulting inferences concerning the structure of production technology. This information is of interest in its own right, and has been the subject of considerable research. However a knowledge of the effect of input aggregation on inferences concerning the structure of technology is valuable for another reason: since productive efficiency is measured relative to an estimated technology, input aggregation also influences one’s inferences concerning the structure of productive efficiency.
In Bangladesh, labour supply is abundant, but land for cultivation is shrinking mainly because of growing human settlement and urbanisation with a very high population density. This study examines whether labour use is efficient in Bangladesh agriculture and analyses the relative efficiency of hired and family labour for three crop seasons. Production functions are estimated using data collected by International Rice Research Institute on expenditures of agricultural inputs and returns on investment from a nationally representative sample of 1928 farm households from all 64 districts of Bangladesh. Results show that family labour is more productive than hired labour in Bangladesh agriculture, which has important policy implications for the rural labour market. Copyright © 2013 John Wiley & Sons, Ltd.
This article examines the substitutability, productivity, efficiency, and evolution of an important agrarian nonmarket institution—labor
sharing. Analysis of field-level data on forest clearing through time among Amazonian shifting cultivators reveals that (a) family, hired, and cooperative labor are perfect substitutes, and hired and cooperative labor are equally productive, and
both are more productive than family labor; (b) the combination of labor market and labor sharing makes productivity-adjusted total labor use unconstrained by household
and network endowments (i.e., efficient labor allocation); and (c) as labor composition is constrained by network endowments and liquidity, credit policies alter both labor composition and
labor network formation.
Considering family labor and hired labor as heterogeneous inputs, we present a theoretical framework in which the optimal decisions of a farm household on on-farm family and hired labor, off-farm labor supply, and leisure are determined uniquely and endogenously. Focusing on two alternative settings with and without off-farm employment constraints, we show that imperfect substitutability between family labor and hired labor is not critical to the separation of household production and consumption. The validity of the separation proposition is shown to depend crucially on whether or not the availability of off-farm job opportunities is limited. We further examine how changes in external economic conditions and government policies affect the time allocation decisions of the household, as well as the composition of household income (i.e., on-farm income and off-farm labor earnings).
What patterns can be discerned in the distribution of farm sizes across countries and over time? How does the behavior of individual economic agents interact with the natural environment and general economic development to affect farm size? How has concerted human intervention, understood as national and supranational policy actions, altered these outcomes? We find that operated farm size rises with economic development, especially in the 20th century, with marked exceptions: large farms in Latin America and Southern Africa; small farms in parts of Northwest Europe; diminishing farm size in South Asia. Despite increased scale, in many advanced countries the family remains the main source of farm labor. Hired labor supervision costs tend to favor family farming as the equilibrium institution. Theory suggests that the family farm will typically become larger with economic development, but its efficiency advantage over the agroindustrial enterprise will decline.
Three themes are related to women's economic roles in the agricultural household. First the unified family as coordinator of production and consumption over a life cycle. Second the role of separability of production and consumption decisions in the agricultural household that depends on the equivalence of hired and of family labor. Third Nashbargaining or Pareto efficient collective coordination in the family. Increases in women's human capital affects gender bargaining and is closely related to declines in child mortality, fertility, and population growth, and increases in child “quality” as proxied by child schooling and health status.
We assess the development economics of on-farm employment with an eye toward policy implications. What do we know and what additional research is needed? The older tradition of labor market dualism and some of the more modern research are seen to share a characteristic of misplaced exogeneity, and calls for asset redistribution and institutional regulation may need to be tempered by more fundamental explanations. Understanding labor contracts as a facilitator of specialization on the farm and in the larger economy is key. Integrating the wedge model of farm behavior with agency-cost explanations of organization will provide a powerful analytical tool. Ultimately, a general equilibrium view with endogenous institutions will deepen our understanding of why total costs of coordination increase even as turnover costs per worker decline and how public policy can facilitate that cooperation.
A stochastic frontier production function with time-varying technical efficiencies is estimated using panel data from ICRISAT's Village Level Studies in three Indian villages. Given the specifications of a linearized version of a Cobb-Douglas stochastic frontier production function with coefficients which are a linear function of time, the hypothesis that the traditional response function is an adequate representation of the data is accepted for only one of the three villages. The hypothesis of time-invariant technical inefficiencies is not rejected for one of the two villages for which significant technical inefficiencies exist. The hypothesis of time-invariant elasticities of the input variables is rejected for two of the three villages. Further, the hypothesis that hired and family labour are equally productive is accepted in only one of the three villages.The technical efficiencies of individual farms exhibited considerable variation in the two villages with either time-invariant or time-varying technical efficiencies.
This paper provides a survey on studies that analyze the macroeconomic effects of intellectual property rights (IPR). The first part of this paper introduces different patent policy instruments and reviews their effects on R&D and economic growth. This part also discusses the distortionary effects and distributional consequences of IPR protection as well as empirical evidence on the effects of patent rights. Then, the second part considers the international aspects of IPR protection. In summary, this paper draws the following conclusions from the literature. Firstly, different patent policy instruments have different effects on R&D and growth. Secondly, there is empirical evidence supporting a positive relationship between IPR protection and innovation, but the evidence is stronger for developed countries than for developing countries. Thirdly, the optimal level of IPR protection should tradeoff the social benefits of enhanced innovation against the social costs of multiple distortions and income inequality. Finally, in an open economy, achieving the globally optimal level of protection requires an international coordination (rather than the harmonization) of IPR protection.
A model is developed and estimated to test for heterogeneity of family and hired labor in agricultural production and to estimate the impact of employer supervision on the productivity of hired labor. Plot-level data are used from a rice-growing village in semi-arid tropical India. The hypothesis that family and hired labor are homogeneous inputs was rejected. Results indicate that family member supervision is required to increase hired labor productivity. Output loss attributable to operating at reduced supervision intensity was greater than 10% on over 40% of the plots.
In this paper, the authors test the hypotheses that family and hired labor are perfect subst itutes in agricultural production in developing countries, and that t here is no quality differential between an hour of family and of hire d labor. Both hypotheses, commonly maintained as assumptions in resea rch on agricultural production, are rejected on the basis of statisti cal tests using farm-level data from India and Malaysia. The two kind s of labor are observed to have an elasticity of substitution between them that is well below infinity (indeed not significantly different from zero in the Indian case), and hired labor is found to be of hig her quality than family labor. The results suggest that more attentio n needs to be paid to the treatment of labor in theoretical and econo metric modeling and in data collection. Copyright 1987 by Blackwell Publishing Ltd
We study whether rural households in Vietnam allocate their factor inputs efficiently. Factor returns and technical rates of substitution (TRS) between production activities are compared. We estimate two translog production functions and conduct three tests: First we test the equality of bootstrapped returns. Second, we use a bootstrapped "t"-test comparing the equality of TRS. Finally, we derive a set of nonlinear restrictions on our estimated parameters, which, if held, would imply that we cannot reject efficiency. The article concentrates on the allocation of factors between the cultivation of the two most important agricultural crops-sugar cane and rice. We cannot reject the possibility that households are efficient in their input allocation. These results are consistent and stable over different estimation techniques and support the assumption of profit maximization. Copyright 2005 International Association of Agricultural Economics.
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