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Effects of the Internal Wage on Output Supply: A Structural Estimation for Japanese Rice Farmers
Author(s) -
Sonoda Tadashi,
Maruyama Yoshihiro
Publication year - 1999
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1244456
Subject(s) - wage , estimation , economics , shadow (psychology) , welfare , agriculture , production (economics) , labour economics , structural estimation , econometrics , microeconomics , market economy , psychotherapist , biology , psychology , ecology , management
The “shadow” or “internal” wage plays a crucial role, via the “internal wage effect,” in models of agricultural households with absent or constrained off‐farm wage employment. To verify its empirical relevance, parameters of the production and welfare functions are estimated for Japanese rice farmers. It is inferred from this structural estimation that their off‐farm wage employment is actually constrained and that the “internal wage effect” of changes in the price of rice significantly influences their supply of rice.