This article examines the decision of farmers to sell part of their farm output on the market, using data from the Republic of Georgia. A two-level empirical model is used, in which endowments and resource allocation decisions determine farm output and non-farm income, and these in turn determine market participation. We found, as expected, that farm output affects market participation positively, while non-farm income affects it negatively. Landholdings have an indirect positive effect on market participation, through its positive effect on farm output. Education has a negative effect on market participation, mainly through its positive effect on non-farm income.