Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/227209 
Year of Publication: 
2020
Series/Report no.: 
IZA Discussion Papers No. 13682
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Market completeness has important implications for household behavior. I firmly reject complete markets for smallholders but am unable to do so for non-smallholders. This leads to important differences in production behavior: smallholders reallocate labor across activities less in response to intra-seasonal crop price changes than do non-smallholders. A counterfactual exercise indicates smallholders could increase revenue by almost nine percent if they were to reallocate labor similarly to non-smallholders. The overall pattern of results is consistent with small-holders lacking sufficient wage employment opportunities. Since non-smallholders have to hire in for agricultural production, this lack of opportunities does not affect their decisions.
Subjects: 
markets
market failures
agriculture
labor
JEL: 
J20
J43
O13
Q12
Q13
Document Type: 
Working Paper

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