a few comments

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Larue_Bruno
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a few comments

Post by Larue_Bruno » Tue Jun 12, 2018 3:53 am

I enjoyed your presentation and reading through your paper.

A few points about your conceptual model and the link to your main empirical result:

Your equation (2) is an identity, not a function. It should read MSi=Qpi-Qci. This is on a product i basis. MS is then the sum of MSi.

It is to be expected that each farmer produces only a subset of crops(Qpi=0 for some crops) and may or may not work off-farm. The crop mix has important implication for profit realized by the farm and the likelihood that the farmer will engage in off-farm work because some crops are more intensive in labor than others. The profit function is conditioned by output and input prices and it could be subject to some constraints like plot size, crop rotation patterns.... The farmer's problem must reflect the main opportunities and constraints.

Thus, your equation (3) is a supply function derived from a multi-output profit function through Hotelling's lemma. As such it is conditioned by output prices, input prices and quantities of fixed inputs like land and possibly some capital assets.

Qc is a household demand function. I would expect household income and consumer prices to be included along with household characteristics.

The main result that off-farm engagement increases in farm income is puzzling because it suggests that the marginal product of labor in agriculture is zero. One would expect that off-farm engagement would decrease farm income while increasing total household income (the sum of farm and off-farm income). Having said that, the positive effect on ag sales might be due to the effect of off farm income on relaxing credit constraints. If some crops require purchased inputs and credit is unavailable, then the best crop mix may not be feasible unless some off-farm work is done to relax the credit constraint. This hypothesis can possibly be validated by talking to farmers or extension specialists. If anecdotal evidence seems to validate this hypothesis, I would modify the conceptual framework to feature the credit constraint on the crop mix.

paulnkegbe
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Re: a few comments

Post by paulnkegbe » Wed Jun 13, 2018 4:18 pm

Thanks

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