Modelling the Efficiency of Family and Hired Labour

This title was first published in 2003.Family based agricultural/farm households are the principal form of economic organization in most developing countries. Empirical models of the agricultural household that recognize its dual role as a producer and consumer unit in a theoretically consistent manner have become essential tools for policy analyses. This book provides an important extension to the conventional farm household model by developing an analytical framework that allows for efficiency differences between family and hired labour inputs. The methodological novelty is to relate the shadow wage rate for family labour to the observed market wage rate for hired labour, allowing for the differential productivity of family and hired labour detected in the production function estimation.