A model of a rural household in KwaZulu

This paper reports an attempt to model household economic behaviour on a small farm in KwaZulu using mathematical programming techniques. To some extent the effects of risk, leisure and off‐farm employment opportunities on resource allocation and farm output are captured in the model Different decision rules including versions of the Wald maximin criterion (Maximin), the Savage regret criterion (Minmax), Motad and maximisation of a ‘sumex’ utility function were used in the optimisation process. Predicted and observed enterprise levels are compared and the paper concludes with comment on the model and problems involving specification of income, leisure and consumption relationships in the programming approach.

Notes

Lecturer, Graduate Assistant and Associate Professor respectively, University of Natal, Pietermaritzburg. The authors gratefully acknowledge financial assistance from the HSRC and helpful comments from an anonymous reviewer.