Abstract
A model of a padi-producing household is developed permitting effects of changes in exogenous variables to be traced through simultaneous changes in household production and consumption behaviour. The model, applied to a village in Central Java, incorporates both a Cobb-Douglas function to represent production of padi for a representative household, and a linear expenditure system to describe the household's consumption behaviour. Assuming a perfect labour market, the model is used to estimate some elasticities of policy significance. An important finding is that padi output, market surplus, employment and rural wages are all positively related to padi price. ∗ The research on which the paper is based was earried out by Mas Soedjono as an M.Ec dissertation in the Department of Agricultural Economics and Business Management, University of New England, Armidale while the drafting of the paper was undertaken at the Agricultural Economics Research Unit. Lincoln College. New Zealand Thanks are due to colleague...
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