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Revealing an Equitable Income Allocation among Dairy Farm Partnerships


  • Dressler, Jonathan B.
  • Tauer, Loren W.


We formulate a method to determine an equitable division of dairy farm partnership income when partners provide unequal amounts of capital, labor, and management and empirically estimate this relationship. New York dairy farm financial data are used within fixed effects and random coefficient panel regression models to reveal a systematic division of dairy farm partnership income among operators’ labor, capital, and management while controlling for heterogeneity arising from differing herd size. Results indicate that controlling for time and heterogeneity across farms due to herd size are important factors when dividing net farm income among unpaid factors of production. Empirical estimates of allocating dairy farm partnership income to equity, operators’ labor, and management are presented.

Suggested Citation

  • Dressler, Jonathan B. & Tauer, Loren W., 2011. "Revealing an Equitable Income Allocation among Dairy Farm Partnerships," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 102116, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea11:102116

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    References listed on IDEAS

    1. Nathaniel Beck, Jonathan N. Katz, 2004. "Random Coefficient models for time-series-cross-section data," Working Papers 1205, California Institute of Technology, Division of the Humanities and Social Sciences.
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    More about this item


    Dairy; opportunity costs; unpaid factors production; net farm income; operators’ labor; capital; management.; Agricultural Finance; Farm Management; Q10; Q12;

    JEL classification:

    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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