A Model of the Mixed Households in Yugoslavia

Mixed household is a semi-commercial farm earning income from several different sources, including possibly a job in the formal, urban economy. Mixed household has been recognized in development economics literature as an important economic agent, but it has not been a subject of much rigorous, modeling analysis so far. This paper aims to fill this gap in the literature and develop a comprehensive model of economic behavior of a mixed household that takes into account its dual - consumer and producer - role and various constraints to its objective function. The model was motivated by the important role mixed that households played in Yugoslavia, especially during the period 1950-1989. The model yields a number of interesting theoretical predictions that can be used in empirical analyses and/or inform policy towards mixed households in developing countries