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Does Participation in the Conservation Reserve Program and Off-Farm Work Affect the Level and Distribution of Farm Household Incomes?

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  • Boisvert, Richard N.
  • Chang, Hung-Hao

Abstract

Using a national survey of U.S farm households, this paper investigates the interrelationship among the decisions to work off the farm by the operator and the spouse, and participation in the Conservation Reserve Program (CRP). The effects of these three decisions on farm household income are also examined. By estimating a heteroscedastic household income function, we identify the effects of participating in these activities on the average level of farm household income and its variation within each sub-group of farms involved in the several combinations of activities. Our empirical results support the hypothesis that participation in the CRP and decisions to work off the farm by the operator and the spouse are made jointly rather than independently. The operators'’ decisions to work off the farm and to participate in CRP increase the mean level of the household income, while the spouses'’ decisions to work off the farm help decrease the variation in household income among households in that sub-group.

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Bibliographic Info

Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2006 Annual meeting, July 23-26, Long Beach, CA with number 21277.

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Date of creation: 2006
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Handle: RePEc:ags:aaea06:21277

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Keywords: Farm Management;

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  1. Barry K. Goodwin & Matthew T. Holt, 2002. "Parametric and Semiparametric Modeling of the Off-Farm Labor Supply of Agrarian Households in Transition Bulgaria," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(1), pages 184-209.
  2. Hisham El-Osta & Ashok Mishra & Mary Ahearn, 2004. "Labor Supply by Farm Operators Under “Decoupled” Farm Program Payments," Review of Economics of the Household, Springer, vol. 2(4), pages 367-385, 08.
  3. Parks, Peter J. & Schorr, James P., 1997. "Sustaining Open Space Benefits in the Northeast: An Evaluation of the Conservation Reserve Program," Journal of Environmental Economics and Management, Elsevier, vol. 32(1), pages 85-94, January.
  4. Lim-Applegate, Hazel & Rodriguez, Gil & Olfert, M. Rose, 2002. "Determinants of non-farm labour participation rates among farmers in Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 46(1), March.
  5. Kwon, Chul-Woo & Orazem, Peter F. & Otto, Daniel M., 2002. "The Determinants Of Participation Decision In Off-Farm Work: The Iowa Case," 2002 Annual meeting, July 28-31, Long Beach, CA 19652, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  6. Atanu Saha & Arthur Havenner & Hovav Talpaz, 1997. "Stochastic production function estimation: small sample properties of ML versus FGLS," Applied Economics, Taylor & Francis Journals, vol. 29(4), pages 459-469.
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  10. Ashok K. Mishra & Barry K. Goodwin, 1997. "Farm Income Variability and the Supply of Off-Farm Labor," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 880-887.
  11. Barry K. Goodwin & Ashok K. Mishra, 2004. "Farming Efficiency and the Determinants of Multiple Job Holding by Farm Operators," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(3), pages 722-729.
  12. Hajivassiliou, Vassilis & McFadden, Daniel & Ruud, Paul, 1996. "Simulation of multivariate normal rectangle probabilities and their derivatives theoretical and computational results," Journal of Econometrics, Elsevier, vol. 72(1-2), pages 85-134.
  13. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
  14. Mishra, Ashok K. & El-Osta, Hisham S. & Morehart, Mitchell J. & Johnson, James D. & Hopkins, Jeffrey W., 2002. "Income, Wealth, And The Economic Well-Being Of Farm Households," Agricultural Economics Reports 33967, United States Department of Agriculture, Economic Research Service.
  15. Huffman, Wallace E., 1991. "Agricultural Household Models: Survey and Critique," Staff General Research Papers 11008, Iowa State University, Department of Economics.
  16. Smith, Richard J & Blundell, Richard W, 1986. "An Exogeneity Test for a Simultaneous Equation Tobit Model with an Application to Labor Supply," Econometrica, Econometric Society, vol. 54(3), pages 679-85, May.
  17. Duke, Joshua M., 2004. "Participation in Agricultural Land Preservation Programs: Parcel Quality and a Complex Policy Environment," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 33(1), April.
  18. Susan Offutt, 2002. "The Future of Farm Policy Analysis: A Household Perspective," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(5), pages 1189-1200.
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