Labour on the Family Farm: A Theory and Some Policy Implications

This paper seeks to examine the labour‐input decisions on family farms at a theoretical level and to demonstrate some policy implications of this theory. Where the family has the opportunity to work on the land, utility maximisation, rather than profit maximisation, would seem to be a more appropriate criterion for decision‐making. Accordingly, the decision‐making process is analysed under this alternative assumption. We then consider some of the policy implications of this model. In particular, we consider the effects of policies on the labour‐inputs since the optimal allocation of labour is at the heart of most agricultural policies.