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Decomposition of Variability in Farm Household Assets and Debt

Author

Listed:
  • Mishra, Ashok K.
  • El-Osta, Hisham S.

Abstract

Farm families often hold large quantities of wealth and, like any other family, assess their financial progress by reviewing their net worth (or wealth) position periodically. Wealth has an impact on many decisions such as production, retirement, and succession of the farm. Households, in general, seek stability growth in wealth and, ideally, income as well. In the case of wealth, farm households will be better equipped to handle variability once the contributing sources are identified. This study measures how much of the variability in farm household assets and debt is attributed to the variability in farm and nonfarm sources of assets and farm and nonfarm sources of debt. Using a normalized variance decomposition approach and data from the Agricultural Resource Management Survey (ARMS), results show that origin of asset and debt variability differs with farm size and location of the farm household.

Suggested Citation

  • Mishra, Ashok K. & El-Osta, Hisham S., 2005. "Decomposition of Variability in Farm Household Assets and Debt," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 23(2).
  • Handle: RePEc:ags:jloagb:59682
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    File URL: http://purl.umn.edu/59682
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    Cited by:

    1. Severini, Simone & Tantari, Antonella, 2014. "The contribution of different off-farm income sources and government payments to regional income inequality among farm households in Italy," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), issue 2, August.
    2. Mishra, Ashok K. & Moss, Charles B. & Erickson, Kenneth W., 2006. "Farm Wealth Inequality Within and Across States in the United States," Agricultural and Resource Economics Review, Cambridge University Press, vol. 35(02), pages 251-264, October.
    3. Ashok Mishra & Hiroki Uematsu & J. Matthew Fannin, 2013. "Measuring precautionary wealth using cross-sectional data: the case of farm households," Review of Economics of the Household, Springer, vol. 11(1), pages 131-141, March.
    4. Key, Nigel & Prager, Daniel & Burns, Christopher, 2015. "Household Income Volatility in U.S. Farm Households," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205407, Agricultural and Applied Economics Association;Western Agricultural Economics Association.

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