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Separability in farm‐household economics: an experiment with linear programming
Author(s) -
Delforce Julie C.
Publication year - 1994
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/j.1574-0862.1994.tb00299.x
Subject(s) - consumption (sociology) , production (economics) , economics , separable space , microeconomics , econometrics , econometric model , linear programming , agricultural economics , mathematics , mathematical optimization , mathematical analysis , social science , sociology
The assumption of separability between farm‐household production and consumption facilitates analysis, but entails several important restrictions. The implications of assuming separability are discussed here in relation to the modelling of a representative Tongan farm‐household. Econometric estimation of household demand is coupled with a linear programming (LP) model of farm‐household production. When analysing consumer demand, separable farm‐household economics is undoubtedly preferable to ignoring the production/consumption linkages entirely. However, the restrictions which must be imposed on the production side of the separable model are such that a realistic LP solution is unlikely to be obtained. This is likely to be a major deterrent to adopting the separable approach for studies in which the main focus is on production rather than consumption.