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Explaining Changes in the Distribution of Annual Dairy Farm Income over Time

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  • Hung-Hao, Chang
  • Boisvert, Richard N.
  • Tauer, Loren W.

Abstract

This paper identifies factors affecting the distribution of farm income among dairy producers over time. Using data from participants in Cornell's Dairy Farm Record Program, we decompose differences of farm income distributions into those due to: differences in means of observable farm characteristics, differential marginal effects of characteristics and unobserved random error. The distribution of farm income is affected by factors reflecting the operators' experience and investment in human capital and indicators of management efficiency and level of capital investment. The marked changes in marginal contributions of these factors explain most of the total change in the distribution of income.

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Bibliographic Info

Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida with number 6544.

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Date of creation: 2008
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Handle: RePEc:ags:aaea08:6544

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Keywords: Dairy farm income distribution; Decomposition; Farm Management; Livestock Production/Industries;

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  1. 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.
  2. Knoblauch, Wayne A. & Putnam, Linda D. & Karszes, Jason, 2003. "Business Summary New York State 2002," Research Bulletins 122110, Cornell University, Department of Applied Economics and Management.
  3. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
  4. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
  5. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
  6. Blau, Francine D & Kahn, Lawrence M, 1996. "International Differences in Male Wage Inequality: Institutions versus Market Forces," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 791-836, August.
  7. Bruce L. Gardner, 2000. "Economic Growth and Low Incomes in Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(5), pages 1059-1074.
  8. Reddy, Wenkateshwar K. & Findeis, Jill L., 1987. "Decomposition Of Income Distribution Among Farm Families," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 16(2), October.
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