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Abstract
Land and market imperfections shape the organization of agricultural production and lead to different
production regimes within rural farm households in South Africa. This paper presents a theoretical model
to explain the presence of three main households groups (classes) determined on the basis of the labor
regime adopted: small peasants (working both on and off farm), self cultivators (autarkic in labor) and
hiring in households. Membership in the three categories is determined by the endogenous shadow wage
and the effective market wages. A generalized ordered logit model is used to test the main predictions of
the model. Market imperfections, which prevent household from accessing markets, are expected to have
different impacts on heterogenous households; in this study, a Brant test on coefficient constancy helps
to identify the household specific factors affecting market participation.