IDEAS home Printed from https://ideas.repec.org/a/eme/afrpps/v71y2011i3p379-397.html
   My bibliography  Save this article

Factors affecting variability in farm and off-farm income

Author

Listed:
  • Kenneth Poon
  • Alfons Weersink

Abstract

Purpose - The purpose of this paper is to examine the factors affecting the relative variability in farm and off-farm income for Canadian farm operators. Design/methodology/approach - Variability of farm and off-farm income is analyzed using a dataset of 17,000 farm operators from 2001 to 2006. Relative ranking of the coefficients of variation (CV) for farm and off-farm income are compared across farm types and are regressed against factors conditioning the variations. Findings - Greater reliance on farm income results in lower (greater) relative variability in farm (off-farm) income. Larger commercial operations experience larger farm income volatility because they are less risk averse or they can manage more risk. Diversification and off-farm employment appear to be risk management strategies for commercial operations. Research limitations/implications - Government payments have a small, positive effect on farm and off-farm income variability, indicating this support leads farmers to take on more risky activities and/or reduce the use of self-insurance activities. Results could also be due to the lag between the time of the income reduction and the time in which the aid is received. Further research is necessary to decipher the effects of government support on farm decisions. Practical implications - The results on relative variation in the farm and off-farm income across farm type raises questions about whether government programs should target specific operations. Originality/value - While income variation remains a focus of public policy, factors affecting its variability are not well-understood. Studies have examined the level of farm income and the decision to participate in off-farm employment but none has examined the variance in both income sources.

Suggested Citation

  • Kenneth Poon & Alfons Weersink, 2011. "Factors affecting variability in farm and off-farm income," Agricultural Finance Review, Emerald Group Publishing, vol. 71(3), pages 379-397, November.
  • Handle: RePEc:eme:afrpps:v:71:y:2011:i:3:p:379-397
    as

    Download full text from publisher

    File URL: http://www.emeraldinsight.com/10.1108/00021461111177639?utm_campaign=RePEc&WT.mc_id=RePEc
    Download Restriction: Access to full text is restricted to subscribers

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Euan Phimister & Esperanza Vera-Toscano & Alfons Weersink, 2002. "Female Participation and Labor Market Attachment in Rural Canada," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(1), pages 210-221.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:spr:agfoec:v:5:y:2017:i:1:d:10.1186_s40100-017-0078-9 is not listed on IDEAS
    2. Kenneth Poon & Alfons Weersink, 2014. "Growing Forward with Agricultural Policy: Strengths and Weaknesses of Canada's Agricultural Data Sets," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 62(2), pages 191-218, June.
    3. Yann de Mey & Erwin Wauters & Dierk Schmid & Markus Lips & Mark Vancauteren & Steven Van Passel, 2016. "Farm household risk balancing: empirical evidence from Switzerland," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 43(4), pages 637-662.
    4. Rosemarie Bégin & Lota D. Tamini & Maurice Doyon, 2014. "L'effet du travail hors-ferme sur l'efficacité technique des fermes laitières québécoises: un modèle intégrant les biais de sélection sur les observables et inobservables," Cahiers de recherche CREATE 2014-9, CREATE.
    5. Enjolras, Geoffroy & Capitanio, Fabian & Aubert, Magali & Adinolfi, Felice, 2012. "Direct payments, crop insurance and the volatility of farm income. Some evidence in France and in Italy," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122478, European Association of Agricultural Economists.
    6. Sauer, Johannes & Finger, Robert, 2014. "Climate Risk Management Strategies in Agriculture – The Case of Flood Risk," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 172679, Agricultural and Applied Economics Association.
    7. de Mey, Yann & Wauters, Erwin & Lips, Markus & Schmid, Dirk & Vancauteren, Mark & Van Passel, Steven, 2014. "Farm household risk balancing in Switzerland and Belgium: an econometric and survey approach," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 186678, European Association of Agricultural Economists.
    8. 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.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:afrpps:v:71:y:2011:i:3:p:379-397. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Virginia Chapman). General contact details of provider: http://www.emeraldinsight.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.