Hostname: page-component-848d4c4894-4hhp2 Total loading time: 0 Render date: 2024-06-01T18:41:01.641Z Has data issue: false hasContentIssue false
  • English
  • Français

Farm Wealth Inequality Within and Across States in the United States

Published online by Cambridge University Press:  15 September 2016

Ashok K. Mishra ,
Charles B. Moss  and
Kenneth W. Erickson
Ashok K. Mishra
Affiliation:
Farm and Rural Household Well-Being Branch of the Resource and Rural Economics Division, Economic Research Service, U.S. Department of Agriculture, Washington, D.C.
Charles B. Moss
Affiliation:
Food and Resource Economics Department, University of Florida, Gainesville
Kenneth W. Erickson
Affiliation:
Farm and Rural Household Well-Being Branch of the Resource and Rural Economics Division, Economic Research Service, U.S. Department of Agriculture, Washington, D.C.
Get access

Abstract

This paper uses Theil's (1979) entropy-based measure of inequality and farm-level data to examine changes in farm business wealth (farm equity) of farm households. The farms associated with farm households are grouped by state into ten regions of the United States. The Theil entropy measure is then calculated and used to decompose total inequality of farm wealth into within-state and across-states (between states) inequalities for each region. Results show that since the enactment of the 1996 Federal Agricultural Improvement and Reform (FAIR) Act, inequality in farm wealth among farms within a state has decreased relative to the number of farms per state, across all regions. Further, most of the reduction in farm wealth inequality is attributed to increased equality in the distribution of real estate assets of the farm households, a major component of farm wealth.

Keywords

inequalityTheil's inequalityfarm wealthregional decompositionfarm levelfarm householdreal estate assetsinventories
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 35 , Issue 2 , October 2006 , pp. 251 - 264
Copyright
Copyright © 2006 Northeastern Agricultural and Resource Economics Association 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Ahearn, M., Johnson, J., and Strickland, R. 1985. “The Well-Being of Farm Households: Farm, Off-Farm, and In-Kind Sources of Income.” American Journal of Agricultural Economics 67(5): 1087–1094.Google Scholar
Atkinson, A. B. 1970. “On the Measurement of Inequality.” Journal of Economic Theory 2(3): 244–263.Google Scholar
Blandford, D. 1999. “Globalization and Northeast Agriculture: Implications for the Upcoming Round of World Trade Negotiations.” Agricultural and Resource Economic Review 28(2): 128–136.Google Scholar
Blank, S. C., Erickson, K. W., and Moss, C. B. 2005. “Profit Patterns across American Agriculture.” Journal of Agricultural and Resource Economics 30(2): 205–230.Google Scholar
Blank, S. C., Erickson, K. W., Moss, C. B., and Nehring, R. 2004. “Agricultural Profits and Farm Household Wealth.” American Journal of Agricultural Economics 86(5): 1299–1307.CrossRefGoogle Scholar
Dubman, R. W. 2000. “Variance Estimation with USDA's Farm Costs and Returns Surveys and Agricultural Resource Management Study Survey.” Report No. AGES 00-01, Economic Research Service, U. S. Department of Agriculture, Washington, D. C.Google Scholar
El-Osta, H., and Morehart, M. 2002. “The Dynamics of Wealth Concentration Among Farm Operator Households.” Agricultural and Resource Economic Review 31(1): 84–96.Google Scholar
Forbes, S. (Chairman). 1991. “Recommendations of the Farm Financial Standards Task Force: Financial Guidelines for Agricultural Producers.” Financial Accounting Standards Board, Norwalk, CT.Google Scholar
Foster, J. E. 1983. “An Axiomatic Characterization of the Theil Measure of Income Inequality.” Journal of Economic Theory 31(1): 105–121.Google Scholar
Kott, P. S. 1998. “Using the Delete-a-group Variance Estimator in NASS Surveys.” Draft research report, National Agricultural Statistics Service (NASS), U. S. Department of Agriculture, Washington, D. C.Google Scholar
Leuthold, R. M. 1969. “Government Payments and the Distribution of Income in Agriculture.” American Journal of Agricultural Economics 51(5): 1520–1523.Google Scholar
Livanis, G., Moss, C. B., Breneman, V. E., and Nehring, R. F. 2006. “Urban Sprawl and Farmland Prices.” American Journal of Agricultural Economics 88(4): 915–929.Google Scholar
Merton, R. C. 1969. “Lifetime Portfolio Selection under Uncertainty: The Continuous-Time Case.” Review of Economics and Statistics 51(3): 247–257.Google Scholar
Mishra, A. K., and El-Osta, H. S. 2005. “Decomposition of Variability in Farm Household Assets and Debt.” Journal of Agribusiness 23(2): 163–182.Google Scholar
Mishra, A. K., El-Osta, H. S., Morehart, M. J., Johnson, J. D., and Hopkins, J. W. 2002. “Income, Wealth, and the Economic Well-Being of Farm Households.” Agricultural Economics Report No. 812, Economic Research Service, U. S. Department of Agriculture, Washington, D. C.Google Scholar
Ramirez, O.A., Moss, C. B., and Boggess, W. G. 1997. “A Stochastic Optimal Control Formulation of the Consumption/Debt Decision.” Agricultural Finance Review 57(1): 29–38.Google Scholar
Shannon, C. E. 1948. Mathematical Theory of Communication. Urbana, IL: University of Illinois Press.Google Scholar
Theil, H. 1967. Economics and Information Theory. Amsterdam: North-Holland Press.Google Scholar
Theil, H. 1979. “World Inequality and Its Components.” Economic Letters 2(1): 99–102.CrossRefGoogle Scholar
U. S. Department of Agriculture. 2004. “Farm Balance Sheet Data.” Economic Research Service, U. S. Department of Agriculture. Available at www.ers.usda.gov/data/farm[-]balancesheet (accessed August 18, 2005).Google Scholar
U. S. Department of Agriculture. Various years. “Agricultural Resource Management Survey.” Annual farm survey (for years 1996–2003), jointly conducted by Economic Research Service and National Agricultural Statistics Service, U. S. Department of Agriculture, Washington, D. C. Available at www.ers.usda.gov/data/arms/ (accessed April 5, 2006).Google Scholar