IDEAS home Printed from
   My bibliography  Save this paper

Crop Prices, Agricultural Revenues, and the Rural Economy


  • Weber, Jeremy
  • Wall, Conor
  • Brown, Jason
  • Hertz, Tom


U.S. policy makers often justify agricultural subsidies by stressing that agriculture is the engine of the rural economy. We use the increase in crop prices in the late 2000s to estimate the marginal effect of increased agricultural revenues on local economies in the U.S. Heartland. We find that $1 more in crop revenue generated 64 cents in personal income, with most going to farm proprietors and workers (59 percent) or nonfarmers who own farm assets (36 percent). The evidence suggests a weak link between revenues and nonfarm income or employment, or on population.

Suggested Citation

  • Weber, Jeremy & Wall, Conor & Brown, Jason & Hertz, Tom, 2014. "Crop Prices, Agricultural Revenues, and the Rural Economy," MPRA Paper 59716, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:59716

    Download full text from publisher

    File URL:
    File Function: original version
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    1. Kislev, Yoav & Peterson, Willis, 1982. "Prices, Technology, and Farm Size," Journal of Political Economy, University of Chicago Press, vol. 90(3), pages 578-595, June.
    2. Shuaizhang Feng & Michael Oppenheimer & Wolfram Schlenker, 2012. "Climate Change, Crop Yields, and Internal Migration in the United States," NBER Working Papers 17734, National Bureau of Economic Research, Inc.
    3. Jeremy Foltz & Kimberly Zeuli, 2005. "The Role of Community and Farm Characteristics in Farm Input Purchasing Patterns," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 27(4), pages 508-525.
    4. Jason P. Brown & Stephan J. Goetz & Mary C. Ahearn & Chyi-lyi (Kathleen) Liang, 2014. "Linkages Between Community-Focused Agriculture, Farm Sales, and Regional Growth," Economic Development Quarterly, , vol. 28(1), pages 5-16, February.
    5. Dimitri, Carolyn & Effland, Anne & Conklin, Neilson C., 2005. "The 20th Century Transformation of U.S. Agriculture and Farm Policy," Economic Information Bulletin 59390, United States Department of Agriculture, Economic Research Service.
    6. Paggi, Mechel S. & Rosson, C. Parr, III & Adcock, Flynn J. & Hanselka, Daniel D., 2011. "National and Regional Impacts of U.S. Agricultural Exports," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 26(1), pages 1-6.
    7. Sneeringer, Stacy & Hertz, Thomas, 2013. "Effects of Large-Scale Hog Production on Local Labor Markets," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, issue 07, pages 1-1, August.
    8. Otto, Daniel, 1986. "Economic Linkages Between Agriculture and Other Sectors Within Rural America," Staff General Research Papers Archive 11018, Iowa State University, Department of Economics.
    9. Lowell Dyson & William Edmondson & Chinkook Lee & Gerald Schluter, 1996. "U.S. agricultural trade and its impact on the Midwest rural economy," Assessing the Midwest Economy GL-1, Federal Reserve Bank of Chicago.
    10. Maureen Kilkenny & Mark D. Partridge, 2009. "Export Sectors and Rural Development," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(4), pages 910-929.
    11. Nickerson, Cynthia & Ebel, Robert & Borchers, Allison & Carriazo, Fernando, 2011. "Major Uses of Land in the United States, 2007," Economic Information Bulletin 291937, United States Department of Agriculture, Economic Research Service.
    12. Weber, Jeremy G., 2012. "The effects of a natural gas boom on employment and income in Colorado, Texas, and Wyoming," Energy Economics, Elsevier, vol. 34(5), pages 1580-1588.
    13. Dayton Lambert & Tim Wojan & Patrick Sullivan, 2009. "Farm Business and Household Expenditure Patterns and Local Communities: Evidence from a National Farm Survey," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 31(3), pages 604-626, September.
    14. Williamson, James M. & Durst, Ron L. & Farrigan, Tracey L., 2013. "The Potential Impact of Tax Reform on Farm Businesses and Rural Households," Economic Information Bulletin 145318, United States Department of Agriculture, Economic Research Service.
    15. John E. Floyd, 1965. "The Effects of Farm Price Supports on the Returns to Land and Labor in Agriculture," Journal of Political Economy, University of Chicago Press, vol. 73, pages 148-148.
    16. Bechdol, Elizabeth & Gray, Allan W. & Gloy, Brent A., 2010. "Forces Affecting Change In Crop Production Agriculture," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 25(4), pages 1-6.
    17. Rao, J. Mohan, 1986. "Agriculture in recent development theory," Journal of Development Economics, Elsevier, vol. 22(1), pages 41-86, June.
    Full references (including those not matched with items on IDEAS)


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

    Cited by:

    1. Xi He, 2020. "US agricultural exports and labor market adjustments," Agricultural Economics, International Association of Agricultural Economists, vol. 51(4), pages 609-621, July.
    2. Apergis, Nicholas & Polemis, Michael, 2018. "Electricity supply shocks and economic growth across the US states: evidence from a time-varying Bayesian panel VAR model, aggregate and disaggregate energy sources," MPRA Paper 84954, University Library of Munich, Germany.
    3. Jason Brown & Timothy Fitzgerald & Jeremy G. Weber, 2016. "Asset Ownership, Windfalls, and Income: Evidence from Oil and Gas Royalties," Research Working Paper RWP 16-12, Federal Reserve Bank of Kansas City, revised 08 Dec 2016.
    4. Weerasooriya, Senal A. & Reimer, Jeffrey J., 2016. "General Equilibrium Analysis of the Farm Bill: SNAP versus Farm Programs," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236076, Agricultural and Applied Economics Association.

    More about this item


    Agriculture; Crop Revenues; Rural Economy;

    JEL classification:

    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    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:pra:mprapa:59716. 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: (Joachim Winter). General contact details of provider: .

    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.