Logo Doctoral Certificate Program in Agricultural Economics Deutsch

Module 1100
Household Behaviour: Theory and Applications


Prof. em. Dr. Michael Grings
Martin-Luther-Universität Halle-Wittenberg
Naturwissenschaftliche Fakultät III
Institut für Agrar- und Ernährungswissenschaften
Karl-Freiherr-von-Fritsch-Str. 4, 06120 Halle
e-mail: michael.grings@landw.uni-halle.de

Course description

The course addresses major dimensions of household behaviour from a microeconomic point of view with particular emphasis on specifics of agricultural households. In a first step the most important concepts for the analysis of household demand for consumer goods are discussed. Additional dimensions of household behaviour are labour supply and the production of agricultural goods, i.e. use of inputs and production of farm output. These are considered in a second step, in such detail as required for the discussion of models of agricultural households.

The interaction of the consumption, labour supply, and agricultural production spheres is then analysed in the context of separable and non-separable household models. The most important aspects of household responses to economic signals are discussed in the framework of a theoretical model. For empirical applications of non-separable models with missing markets, where econometric estimation is difficult, simulation models can be used. In this case ensuring theoretical consistency of the models usually requires parameter calibration. The discussion of a model from the literature illustrates the approach.

The objective of the course is to deepen the understanding of major concepts of microeconomic theory which are relevant for the analysis of the behaviour of rural households in developing and transition countries. The presentation uses graphical and algebraic approaches and numerical examples.

Course outline

  1. Introduction
    1. Overview of the course
    2. The role of theory and models in scientific reseach
  2. Fundamentals: household demand and supply
    1. Theory of household demand and labor supply
      1. Basic concepts
      2. Dual representations of preferences
      3. Labour supply
    2. Agricultural production, supply and factor demand
      1. Basic concepts
      2. Profit functions and quasi-rent functions
  3. Agricultural household models
    1. The theory of the agricultural household: Overview
    2. Separability of production, consumption and labour supply decisions
    3. Nonseparability due to missing markets
    4. An example of a non-separable agricultural household model
    5. Some aspects of model calibration in the non-separable case

Teaching methods

Lectures (50 %), classroom exercises(30 %)
Language: English


Participants should have a good knowledge of the basic concepts of the microeconomic theory of the household and the firm.


For a certificate of successful participation the solution of problems (homework after the course) is required.
Credit points: 3 CP


Selected additional literature