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Testing for Separability in Household Models with Heterogeneous Behavior: A Mixture Model Approach

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  • Vakis, Renos
  • Sadoulet, Elisabeth
  • de Janvry, Alain
  • Cafiero, Carlo

Abstract

Knowing whether a household behaves according to separability or non-separability is needed for the correct modeling of production decisions. We propose a superior test to those found in the literature on separability by using a mixture distribution approach to estimate the probability that a farm household behaves according to non-separability, and test that the determinants of consumption affect production decisions for households categorized as non-separable. With non-separability attributed to labor market constraints, the switcher equation shows that Peruvian farm households that are indigenous and young, with low levels of education, and lack of local employment opportunities are more likely to be constrained on the labor market.

Suggested Citation

  • Vakis, Renos & Sadoulet, Elisabeth & de Janvry, Alain & Cafiero, Carlo, 2004. "Testing for Separability in Household Models with Heterogeneous Behavior: A Mixture Model Approach," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt4hs3g5dj, Department of Agricultural & Resource Economics, UC Berkeley.
    • Handle: RePEc:cdl:agrebk:qt4hs3g5dj
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    2. Mardochée Ngandu Mulotwa & Christian Mabi & Isaac Kalonda & Séraphin Mvudi, 2018. "Labor Demand and Farm Household Welfare Under Non-separability in South Kivu (DRC) [Demande du travail agricole et bien-être des ménages agricoles sous non-séparabilité au Sud-Kivu (RD Congo)]," Working Papers hal-01845493, HAL.
    3. Hayatullah Ahmadzai, 2018. "Factor market participation and tests for separability in Afghanistan," Discussion Papers 2018-10, University of Nottingham, CREDIT.
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    5. Allen, James E., 2018. "Are agricultural markets more developed around cities? Testing for urban heterogeneity in separability in Tanzania," Food Policy, Elsevier, vol. 79(C), pages 199-212.
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    7. Arcand, Jean-Louis & d'Hombres, Beatrice, 2006. "Testing for Separation in Agricultural Household Models and Unobservable Household-Specific Effects," MPRA Paper 1863, University Library of Munich, Germany.
    8. Christophe Muller, 2014. "A Test of Separability of Consumption and Production Decisions of Farm Households in Ethiopia," Post-Print hal-01463117, HAL.
    9. Useche, Pilar & Blare, Trent, 2013. "Traditional vs. modern production systems: Price and nonmarket considerations of cacao producers in Northern Ecuador," Ecological Economics, Elsevier, vol. 93(C), pages 1-10.
    10. Greenwell C MATCHAYA & Pius CHILONDA, 2012. "Estimating Effects Of Constraints On Food Security In Malawi: Policy Lessons From Regressions Quantiles," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 12(2).
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    12. Blaise Waly BASSE & Amadou Abdoulaye FALL, 2023. "Allocation de la main-d’œuvre dans les exploitations rizicoles au Sénégal," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 57, pages 49-61.
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    14. Sudha Narayanan & Digvijay S Negi & Tanu Gupta, 2023. "Separability, spillovers, and segmented markets : Evidence from dairy in India," Agricultural Economics, International Association of Agricultural Economists, vol. 54(6), pages 884-899, November.
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