There is a need to examine differences in the income transfer efficiency of the US government spending on different farm programs, including counter-cyclical, direct, disaster, and marketing loan. There are several reasons to expect a less than one-to-one relationship between extra program payments and extra income that farm households earn from farming. The estimated coefficients obtained for the exogenous income variable all cluster about one, implying that a one-dollar increase in this category will tend to cause a one-dollar increase in farm household income. Payments completely delinked from production decisions would constitute exogenous income in the same sense as various kinds of income that is added together in creating the unearned income variable. A more statistically viable difference is between farms with and without off-farm income. Disaster payments do not have a discernable effect on income of farms with off-farm earnings.
ASJC Scopus subject areas
- Agricultural and Biological Sciences (miscellaneous)
- Economics and Econometrics