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Household-farm systems‘ economic responses

Household-farm systems‘ economic responses. Stephan Brosig*, Michael Grings**. * Leibniz Institute of Agricultural Development in Central and Eastern Europe, Halle, Germany ** Martin-Luther-University Halle-Wittenberg, Institute of Agricultural and Food Science. Background, Motivation.

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Household-farm systems‘ economic responses

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  1. Household-farm systems‘ economic responses Stephan Brosig*, Michael Grings** * Leibniz Institute of Agricultural Development in Central and Eastern Europe, Halle, Germany ** Martin-Luther-University Halle-Wittenberg, Institute of Agricultural and Food Science

  2. Background, Motivation • Small scale farms do not provide sufficient base for many families‘ livelihood • Over a third of the current agricultural workforce underemployed • Vast changes in external conditions and agricultural structures • Pending policy changes (alternative options) • => knowledge of behavioural patterns needed for forecasts and assessment of policy impacts

  3. Research goal • A model framework to analyze farm-household responses: • Consumption, production and market demand and ­supply of goods • Demand and supply of production inputs and factors • Allocation of family time to leisure, farm- and off-farm work • Demand for hired labour

  4. Structure of presentation • Approach: Household model • Data • Estimation and analyses planned • Outlook and further issues

  5. Household models • Behavioural assumption: • Households decide simultaneously on consumption, production, and labour supply when • Markets on which producers compete with consumers do not function perfectly and/or • Family and market labour and/or purchased and self-produced goods are no perfect substitutes • Consequence: • Interdependent (nonseparable) model required

  6. Household models • Literature: selected studies estimating farm-household responses:

  7. Data • RCRE FSRS, Stat.YB (f. prices), Zhejiang, Hubei, Yunnan, 1995-2006??? • Vars. • needed:

  8. Aggregation issues & analyses planned • With this first aggregation: • Testing the iterative approach (does it make a difference?) • Overall responses (of prod./inp. dmd/lab. spl on e.g. price (tax-) changes • Welfare effects of price changes • Simulations yielding distributional results / w. covariates • Disaggregation, extension: • Labour market • Disaggregation for more specific results and better fit

  9. Present state & further issues • Data work and experiments with simple demand models • Plans: • Utilise Panel structure • Data inconsistencies over time

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