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The Effect of Agricultural Policy Reforms on Income Inequality in Swiss Agriculture - An Analysis for Valley, Hill and Mountain Regions

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  • El Benni, Nadja
  • Finger, Robert

Abstract

We analyse the development of income inequality in Swiss agriculture for the period 1990-2009. To this end, Gini coefficients are estimated using FADN data. Furthermore, we estimate concentration ratios and Gini elasticities for market income, direct payments and off-farm income. Our analysis is separated for the three production regions in Swiss agriculture: valley, hill and mountain regions. This study is motivated by the fact that Swiss agricultural policy reforms resulted in dramatic changes of the importance of different income sources in the here considered period. Our results show that household income inequality increased only slightly between 1990 and 2009. Furthermore, agricultural policy reforms affected the income inequality differently in the considered production regions. More specifically, the introduction of area-based direct payments in 1992 mainly affected the valley region. In contrast, the introduction of cross-compliance and abandonment of farm household payments in 1999 had stronger effects for farmers in the hilly and mountainous region. An increase in direct payment income would decrease household income inequality, especially in the mountain and hill regions. Also off-farm income reduces income inequality while market income increases inequality.

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Bibliographic Info

Paper provided by European Association of Agricultural Economists in its series 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland with number 114346.

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Date of creation: 2011
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Handle: RePEc:ags:eaae11:114346

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Keywords: Agricultural and Food Policy; Agricultural Finance;

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  1. Pyatt, Graham & Chen, Chau-nan & Fei, John, 1980. "The Distribution of Income by Factor Components," The Quarterly Journal of Economics, MIT Press, vol. 95(3), pages 451-73, November.
  2. Van de Ven, J., 2001. "Distributional Limits and GINI Coefficient," Department of Economics - Working Papers Series 776, The University of Melbourne.
  3. Schenker N. & Gentleman J. F., 2001. "On Judging the Significance of Differences by Examining the Overlap Between Confidence Intervals," The American Statistician, American Statistical Association, vol. 55, pages 182-186, August.
  4. Mishra, Ashok & El-Osta, Hisham & Gillespie, Jeffrey M., 2009. "Effect of agricultural policy on regional income inequality among farm households," Journal of Policy Modeling, Elsevier, vol. 31(3), pages 325-340, May.
  5. Lerman, Robert I & Yitzhaki, Shlomo, 1985. "Income Inequality Effects by Income," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 151-56, February.
  6. El-Osta, Hisham S. & Bernat, G. Andrew, Jr. & Ahearn, Mary Clare, 1995. "Regional Differences In The Contribution Of Off-Farm Work To Income Inequality," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 24(1), April.
  7. Fei, John C H & Rainis, Gustav & Kuo, Shirley W Y, 1978. "Growth and the Family Distribution of Income by Factor Components," The Quarterly Journal of Economics, MIT Press, vol. 92(1), pages 17-53, February.
  8. Mary Keeney, 2000. "The Distributional Impact of Direct Payments on Irish Farm Incomes," Journal of Agricultural Economics, Wiley Blackwell, vol. 51(2), pages 252-265.
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