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Farmers' time allocation between farm work and off‐farm work and the importance of unobserved group effects: evidence from Israeli cooperatives

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  • Ayal Kimhi

Abstract

Agricultural cooperatives differ in many attributes which affect members' farm and off‐farm earnings in different ways. As a result, time allocation patterns between farm work and off‐farm work will vary significantly across cooperatives. Participation equations in farm work and off‐farm work of farmers who are members of Israeli moshavim are estimated jointly, including a cooperative‐specific factor in each equation. The fixed effects are found to be significant and important, but can be only partly explained by observed cooperative attributes. This provides another support to the Monte Carlo results of Borjas and Sueyoshi, that controlling for group effects is superior to alternative models. The results also imply that unobserved factors have considerable effects on farmers' time allocation, and hence should be controlled for whenever possible.

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  • Ayal Kimhi, 1996. "Farmers' time allocation between farm work and off‐farm work and the importance of unobserved group effects: evidence from Israeli cooperatives," Agricultural Economics, International Association of Agricultural Economists, vol. 14(2), pages 135-142, July.
    • Handle: RePEc:bla:agecon:v:14:y:1996:i:2:p:135-142
    DOI: 10.1111/j.1574-0862.1996.tb00409.x
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    1. Huffman, Wallace E, 1980. "Farm and Off-Farm Work Decisions: The Role of Human Capital," The Review of Economics and Statistics, MIT Press, vol. 62(1), pages 14-23, February.
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    2. Tocco, Barbara & Davidova, Sophia & Bailey, Alastair, 2016. "Part-Time Farming in Italy: Does Farm Size Really Matter?," 90th Annual Conference, April 4-6, 2016, Warwick University, Coventry, UK 236291, Agricultural Economics Society.
    3. Woldehanna, Tassew & Lansink, Alfons Oude & Peerlings, Jack, 2000. "Off-farm work decisions on Dutch cash crop farms and the 1992 and Agenda 2000 CAP reforms," Agricultural Economics, Blackwell, vol. 22(2), pages 163-171, March.
    4. Marcel Fafchamps & Agnes R. Quisumbing, 1999. "Human Capital, Productivity, and Labor Allocation in Rural Pakistan," Journal of Human Resources, University of Wisconsin Press, vol. 34(2), pages 369-406.
    5. Tocco, Barbara & Bailey, Alastair & Davidova, Sophia & Raimondi, Valentina, 2015. "Women and Part-Time Farming: Understanding Labor Supply Decisions in Italian Farm Households," 2015 Conference, August 9-14, 2015, Milan, Italy 211932, International Association of Agricultural Economists.
    6. Berbel, J. & Rodriguez-Ocana, A., 1998. "An MCDM approach to production analysis: An application to irrigated farms in Southern Spain," European Journal of Operational Research, Elsevier, vol. 107(1), pages 108-118, May.

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