A Model of a Padi Farming Household in Central Java?

A model of a padi-producing household is developed permitting effects of changes in exogenous variables to be traced through simultaneous changes in household production and consumption behaviour. The model, applied to a village in Central Java, incorporates both a Cobb-Douglas function to represent production of padi for a representative household, and a linear expenditure system to describe the household's consumption behaviour. Assuming a perfect labour market, the model is used to estimate some elasticities of policy significance. An important finding is that padi output, market surplus, employment and rural wages are all positively related to padi price.