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Income Stabilization Through Government Payments: How Is Farm Household Consumption Affected?

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Author Info

  • Whitaker, James B.
  • Effland, Anne

Abstract

We estimate the impacts of various types of government payments to U.S. agriculture on different components of farm household consumption. Using 2003 to 2005 data from the Agricultural Resource Management Survey (ARMS), we show that marginal rates of consumption differ by consumption category and income source, including different types of farm program payments. The results suggest that farm households treat income from different sources as imperfect substitutes and may reserve income from specific sources for specific types of consumption. Implications for the effects of different types of government payments on the farm household are considered.

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File URL: http://purl.umn.edu/49863
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Bibliographic Info

Article provided by Northeastern Agricultural and Resource Economics Association in its journal Agricultural and Resource Economics Review.

Volume (Year): 38 (2009)
Issue (Month): 1 (April)
Pages:

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Handle: RePEc:ags:arerjl:49863

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Web page: http://www.narea.org/
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Related research

Keywords: agricultural policy; consumption; farm households; government payments; Agricultural and Food Policy;

References

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  1. Anonymous & Hopkins, Jeffrey W., 2003. "Decoupled Payments: Household Income Transfers In Contemporary U.S. Agriculture," Agricultural Economics Reports 34057, United States Department of Agriculture, Economic Research Service.
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  8. Westcott, Paul C., 2005. "Counter-Cyclical Payments Under the 2002 Farm Act: Production Effects Likely to be Limited," Choices, Agricultural and Applied Economics Association, vol. 20(3).
  9. Holbrook, Robert & Stafford, Frank P, 1971. "The Propensity to Consume Separate Types of Income: A Generalized Permanent Income Hypothesis," Econometrica, Econometric Society, vol. 39(1), pages 1-21, January.
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  12. James B. Whitaker, 2007. "The Varying Impacts of Agricultural Support Programs on U.S. Farm Household Consumption," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(3), pages 569-580.
  13. Chang-Tai Hsieh, 2003. "Do Consumers React to Anticipated Income Changes? Evidence from the Alaska Permanent Fund," American Economic Review, American Economic Association, vol. 93(1), pages 397-405, March.
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Cited by:
  1. Jones, Carol Adaire & Milkove, Daniel & Paszkiewicz, Laura, 2010. "Farm Household Well-Being: Comparing Consumption- and Income-Based Measures," Economic Research Report 58299, United States Department of Agriculture, Economic Research Service.

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