Document Type

Report

Publication Date

3-1987

Number

165

Abstract

When a husband or (and) wife in a farm household do not participate in off-farm work, optimal hours of off-farra work for one or both of them will be at the boundary of one or two non-negativity constraints. These boundary solutions have important implications for household choices because when they occur, the marginal value of an individual's time is no longer determined by the external labor market. It is determined internally to the household by weighing the demand for an individual's on-farm labor and home time against his (her) time endowment. Each time that a binding non-negativity constraint is encountered, the economic structure—variables to be included and coefficients—of household choice functions is changed.

Published As

This paper is published in The Review of Economics and Statistics, Vol. 71, No. 3 (Aug., 1989), pp. 471-480