Marketing of food crops and purchase of industrial commodities by Nyanza smallholders, 1970-1971.
Abstract
We consider the i).lioca.tionproblem of A rurfll household
whose income is Awdlable in the form of c+r inventories of farm
produce and an Rmount of cash income from non-farm !lctivity. The
inventories avail~ble may be sold to earn cash at a price of T.
The inventories may be supplemented by pur-chase Cl.tmarket prices w.
The budgeting problem of the householrl.is the problem of optimizing
both sales of inventories 3.nd the consumption of commodities. The
level of purchases are structurally related to inventories through
the level of sales and cash income.
The optimum ~ales - consumption allocation depends heavLl.y
on the demogr-aphf,c composition of the househo Ld, An household with
fe"f members needs to reserve less of the inventory for subsistence
than a household :·rithmany member-a, The ana Lysd.s emphasizes the
effect of changing household composition on the allocative choices
made.
The model set forth iS3 combination of .'3, system of purchase
equations used to explain allocation of consumption and a multivariate
logit model used to e;~lain the proportion of inventories
Rold. The novel features of the model include!
(a) Conditioning the behavior of the household on its
initial stocks;
(b) The use of transactions cost to define discrete
difference A l)et''leensellers and buyers of foodstuffs?
(c) Testine for interrel~tionships between the structure
of income cour ces and the ~'d.llingness to sell foodstuffs;
and
Cd) structuring the model to mnke the consecuences of
demogr-aphf.c change clearly evident? even ';!henthe existing
population is restructured into more or fewer households .•
Citation
Institute of Development StudiesPublisher
University of Nairobi