Agricultural Household-Firm Units: Adjustments to Change

This paper assesses agricultural household-firm unit models to determine a useful typology for agricultural policy assessment that draws upon their use. Both standard and bargaining models for analyzing household decisions, including production, consumption, labor, credit, fertility and child schooling, intergenerational transfer, among other key behaviors of households are discussed, as well as data and estimation issues often encountered with household models. Relevant dimensions of a country or region typology are then suggested, focusing on (1) the extent to which markets, particularly labor markets, are perfect, missing or mixed; (2) relevant intra-household and key demographic considerations; and (3) the differentiation of particular household-firm units that are particularly disadvantaged and may be of the most critical policy concern.