A THEORY OF PETTY TRADING - THE JAMAICAN HIGGLER

The theory of home production/time allocation is used to model the beh aviour of the petty traders who predominate in marketing the surplus f oodstuff of peasant farmers in Jamaica and in other LDCs. Analysis of the behaviour of petty traders in terms of rational responses to price and income changes shows that they may not always obey the laws of su pply and demand due to the absence of an exogenous wage. The model sho uld prove useful in empirical studies of economic behaviour in the inf ormal sector of many economies.