ABSTRACT
This chapter presents the analytical structure of a farm household model that allows for family and hired labour to be heterogeneous inputs in production. The model structure permits different types of heterogeneity, and homogeneity of the labour inputs occurs as a special case of the general model. The focus of this chapter is not on the specific sources of the heterogeneity, but the manner in which it affects the analytical structure of the basic farm household model. A key objective is to show under what conditions the recursive property of farm household models is maintained even with heterogeneous labour inputs; and to derive the implications of this structure for estimating the labour supply component of the model.
