A System Comparison Approach to Distinguish Two Nonseparable and Nonnested Agricultural Household Models |
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Authors: | Tadashi Sonoda |
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Affiliation: | Tadashi Sonoda is associate professor, Graduate School of Economics, Nagoya University (). |
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Abstract: | This study distinguishes two nonseparable agricultural household models for a self-employed farm household. One assumes heterogeneity of farm and nonfarm labor and a competitive market for nonfarm labor. The other assumes homogeneity of the two types of labor and a restricted market for nonfarm labor. We compare demand systems that are derived from them, which have different dependent variables and different numbers of equations. We apply a Cox-type test to compare these complicated nonnested systems. Results show clearly that the former is better for Japanese rice-farming households. Comparison of price elasticities for those models verifies the importance of that test. |
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Keywords: | agricultural household model Cox-type test farm and nonfarm labor heterogeneity internal wage nonnested models nonseparability restricted nonfarm work hours system comparison |
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