Separability in farm‐household economics: an experiment with linear programming

Julie C. Delforce

Agricultural Economics, 1994, vol. 10, issue 2, 165-177

Abstract: 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.

Date: 1994
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