This is a revised and expanded edition of a popular textbook on the economics of farm households in developing countries. The second edition retains the same building blocks designed to explore household decision-making in a social context. Key topics are efficiency, risk, time allocation, gender, agrarian contracts, farm size and technological change. For these and other topics, household economic behaviour represents the outcome of social interactions within the household, and market interactions outside the household. A new chapter on the environment combines exposition of economic tools not previously covered in the book with examination of household and community decision-making in relation to environmental resources.