Abstract
We analyse the simultaneous determination and evolution over time of work choices and the level of farm activity, using a panel of Israeli farm households. We estimate jointly a multinomial choice model of work activity and an endogenous switching regression of farm size, accounting for unobserved heterogeneity and correcting for simultaneity bias. Our results imply that some family farms tend to expand over time and specialise in farming, whereas other farm households downsize their farming operation and increase their engagement in the off-farm labour market. Therefore, the size distribution of farms is converging towards a bimodal distribution.
| Original language | English |
|---|---|
| Pages (from-to) | 49-71 |
| Number of pages | 23 |
| Journal | European Review of Agricultural Economics |
| Volume | 33 |
| Issue number | 1 |
| DOIs | |
| State | Published - Mar 2006 |
Bibliographical note
Funding Information:This research was supported in part by Research Grant Award IS-3291-02 from BARD, the United States–Israel Binational Agricultural Research and Development Fund. We thank Elana Dror from the Central Bureau of Statistics in Israel for providing the data. The research was completed when the second author served as the Bogen Visiting Associate Professor of Economics at the University of Pennsylvania.
Keywords
- Endogeneity
- Farm size
- Off-farm work
- Panel
- Unobserved heterogeneity
