Extended and Full Incomes at the Household and Individual Level: An Application to Farm Households

This study illustrates the methodology used in computing total farm household, extended, and full income both at the household and individual level for a sample of Italian farm households and compares the distribution of these incomes across genders.The notion of extended and full incomes is important both to understand differences in family organization and to describe how households respond to policy changes by reallocating labor among the farm, the home, and the off-farm opportunities.Information about off-farm paid employment permits the derivation of total and disposable farm household income (Hill, Eurostat, Organization for Economic Cooperation and Development (OECD), Smeeding, Smeeding and Weinberg).The family portfolio of labor choices also includes employment in domestic activities.This form of self-employment is valued at the unpaid equilibrium shadow wage and, if a competitive environment is assumed, corresponds to the opportunity cost of time.The incorporation of this implicit source of income in the computation of household incomes gives the extended income (Lazear and Michael, Jenkins and O'Leary, International Research and Training Institute for the Advancement of Women (INSTRAW).The sum of extended income and the value of leisure time form the Beckerian notion of full income (Becker).Under both a behavioral and a policy point of view, it is relevant to take into formal con-