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Humboldt-Universität zu Berlin - Lebenswissenschaftliche Fakultät - Quarterly Journal of International Agriculture

Quarterly Journal of International Agriculture No. 2/06

A comparison of parametric and semi-parametric estimators of farm profit-accounting for sample design in household surveys

Dean Jolliffe
Economic Research Service, USDA, Washington, DC, USA, and the Institute for the Study of Labor (IZA), Bonn, Germany


Much empirical research assumes that data are selected from a sample frame using a simple random draw, when in practice farm-household survey data most typically results from complex, multi-stage sample designs. This paper shows that understanding sample design is important to determining an appropriate estimation strategy, and argues that the least absolute deviations (LAD) and censored least absolute deviations (CLAD) regression are useful tools when using survey data which comes from a multi-stage draw. LAD and CLAD estimators are used to predict the effect of education on farm and non-farm income and labor supply. CLAD standard errors, which are robust to violations of homoscedasticity and independence, are generated by a boot-strap method which replicates the two-stage sample design.

Keywords: farm households, off-farm labor, human capital, least absolute deviations, censored least absolute deviations, sample design, Ghana

JEL: C14, C42, I2

Vol. 45 (2006), No. 2: 107-125