IDEAS home Printed from https://ideas.repec.org/a/ags/arerjl/55705.html
   My bibliography  Save this article

Welfare Decomposition in the Context of the Life Cycle of Farm Operators: What Does a National Survey Reveal?

Author

Listed:
  • El-Osta, Hisham S.
  • Morehart, Mitchell J.

Abstract

This paper examines the role of the life cycle in impacting the distribution of a combined income and wealth measure using data from the 2001 and 2006 Agricultural Resource Management Survey. Such an assessment is made using both graphical representation of the distribution of the well-being measure along with utilization of the social welfare decomposition procedure. Results show a mild yet statistically insignificant improvement in the distribution of the economic measure over the five-year period. Contribution to social welfare is found highest among the cohort where the age of the head of household is between 45 and 54 years. Targeted programs are found to enhance social welfare if they are aimed towards cohorts where the age of the head of household is younger than 35 years or where the age of the head of household is in the 35-to-44 age group, depending on whether the analysis is based on a per-farm household or on a per-capita basis.

Suggested Citation

  • El-Osta, Hisham S. & Morehart, Mitchell J., 2009. "Welfare Decomposition in the Context of the Life Cycle of Farm Operators: What Does a National Survey Reveal?," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 38(2), pages 1-17, October.
    • Handle: RePEc:ags:arerjl:55705
    DOI: 10.22004/ag.econ.55705
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/55705/files/el-osta%20-%20current.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.55705?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Kleiber, Christian, 2005. "The Lorenz curve in economics and econometrics," Technical Reports 2005,30, Technische Universität Dortmund, Sonderforschungsbereich 475: Komplexitätsreduktion in multivariaten Datenstrukturen.
    2. Branko Milanovic, 2002. "True World Income Distribution, 1988 and 1993: First Calculation Based on Household Surveys Alone," Economic Journal, Royal Economic Society, vol. 112(476), pages 51-92, January.
    3. Inada, Ken-ichi, 1971. "Social Welfare Function and Social Indifference Surfaces," Econometrica, Econometric Society, vol. 39(3), pages 599-624, May.
    4. Bishop, John A & Formby, John P & Thistle, Paul D, 1992. "Explaining Interstate Variation in Income Inequality," The Review of Economics and Statistics, MIT Press, vol. 74(3), pages 553-557, August.
    5. Kotlikoff, Laurence J & Summers, Lawrence H, 1981. "The Role of Intergenerational Transfers in Aggregate Capital Accumulation," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 706-732, August.
    6. Gottschalk, Peter, 1993. "Changes in Inequality of Family Income in Seven Industrialized Countries," American Economic Review, American Economic Association, vol. 83(2), pages 136-142, May.
    7. Singh, S K & Maddala, G S, 1976. "A Function for Size Distribution of Incomes," Econometrica, Econometric Society, vol. 44(5), pages 963-970, September.
    8. Esfandiar Maasoumi & Almas Heshmati, 2000. "Stochastic dominance amongst swedish income distributions," Econometric Reviews, Taylor & Francis Journals, vol. 19(3), pages 287-320.
    9. repec:bla:econom:v:50:y:1983:i:197:p:3-17 is not listed on IDEAS
    10. Boisvert, Richard N. & Ranney, Christine K., 1990. "Accounting For The Importance Of Nonfarm Income On Farm Family Income Inequality In New York," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 19(1), pages 1-11, April.
    11. Hill, Berkeley, 2002. "Measures of Economic Status - Combining Income and Wealth into a Single Measure of the Potential Command Over Goods and Services," Workshop on the Farm Household-Firm Unit: Its Importance in Agriculture and Implications for Statistics, April 12-13,2002, Wye Campus, Imperial College 15715, International Agricultural Policy Reform and Adjustment Project (IAPRAP).
    12. David E. A. Giles, 2004. "Calculating a Standard Error for the Gini Coefficient: Some Further Results," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 66(3), pages 425-433, July.
    13. Richard V. Burkhauser & Timothy M. Smeeding & Joachim Merz, 1996. "Relative Inequality And Poverty In Germany And The United States Using Alternative Equivalence Scales," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 42(4), pages 381-400, December.
    14. Frank A. Cowell, 2008. "Income Distribution and Inequality," Chapters, in: John B. Davis & Wilfred Dolfsma (ed.), The Elgar Companion to Social Economics, chapter 13, Edward Elgar Publishing.
    15. Larson, Donald K. & Carlin, Thomas A., 1974. "Income And Economic Status Of People With Farm Earnings," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 6(2), pages 1-7, December.
    16. Gale, Fred, 2002. "The Graying Farm Sector Legacy of Off-Farm Migration," Rural America/ Rural Development Perspectives, United States Department of Agriculture, Economic Research Service, vol. 17(3), September.
    17. Modigliani, Franco, 1986. "Life Cycle, Individual Thrift, and the Wealth of Nations," American Economic Review, American Economic Association, vol. 76(3), pages 297-313, June.
    18. Richard V. Burkhauser & J. S. Butler & James T. Wilkinson, 1985. "Estimating Changes in Well-Being Across Life: A Realized vs. Comprehensive Income Approach," NBER Chapters, in: Horizontal Equity, Uncertainty, and Economic Well-Being, pages 69-90, National Bureau of Economic Research, Inc.
    19. Paglin, Morton, 1975. "The Measurement and Trend of Inequality: A Basic Revision," American Economic Review, American Economic Association, vol. 65(4), pages 598-609, September.
    20. P. Jenkins, Stephen & Jäntti, Markus, 2005. "Methods for summarizing and comparing wealth distributions," ISER Working Paper Series 2005-05, Institute for Social and Economic Research.
    21. El-Osta, Hisham S. & Morehart, Mitchell J., 2002. "The Dynamics of Wealth Concentration Among Farm Operator Households," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 31(1), pages 1-13, April.
    22. Larson, Donald K. & Carlin, Thomas A., 1974. "Income and Economic Status of People with Farm Earnings," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 6(2), pages 73-79, December.
    23. Johansson,Per-Olov, 1991. "An Introduction to Modern Welfare Economics," Cambridge Books, Cambridge University Press, number 9780521356954, November.
    24. El-Osta, Hisham S. & Morehart, Mitchell J., 2002. "The Dynamics of Wealth Concentration Among Farm Operator Households," Agricultural and Resource Economics Review, Cambridge University Press, vol. 31(1), pages 84-96, April.
    25. Kearl, J. R. & Pope, Clayne L., 1983. "The Life Cycle in Economic History," The Journal of Economic History, Cambridge University Press, vol. 43(1), pages 149-158, March.
    26. Mishra, Ashok K. & El-Osta, Hisham S. & Morehart, Mitchell J. & Johnson, James D. & Hopkins, Jeffrey W., 2002. "Income, Wealth, And The Economic Well-Being Of Farm Households," Agricultural Economic Reports 33967, United States Department of Agriculture, Economic Research Service.
    27. El-Osta, Hisham S. & Mishra, Ashok K., 2005. "Dimensions of Wealth Dispersion Among Farm Operator Households: An Assessment of the Impact of Farm Subsidies," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 37(1), pages 187-208, April.
    28. Robert A. Pollak, 1979. "Bergson-Samuelson Social Welfare Functions and the Theory of Social Choice," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 93(1), pages 73-90.
    29. Lerman, Robert I. & Yitzhaki, Shlomo, 1989. "Improving the accuracy of estimates of Gini coefficients," Journal of Econometrics, Elsevier, vol. 42(1), pages 43-47, September.
    30. Orden, David, 2003. "U.S. agricultural policy: The 2002 Farm Bill and WTO DOHA Round proposal," TMD discussion papers 109, International Food Policy Research Institute (IFPRI).
    31. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    32. Brian W. Gould & William E. Saupe, 1990. "Changes in the Distribution of Income and Wealth of Farm Households: Evidence from Wisconsin Panel Data," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 12(1), pages 31-46.
    33. Beach, Charles M & Richmond, James, 1985. "Joint Confidence Intervals for Income Shares and Lorenz Curves," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 26(2), pages 439-450, June.
    34. Sen, Amartya, 1997. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198292975.
    35. Sen, Amartya, 1974. "Informational bases of alternative welfare approaches : Aggregation and income distribution," Journal of Public Economics, Elsevier, vol. 3(4), pages 387-403, November.
    36. Mary C. Daly & Heather Royer, 2000. "Cyclical and demographic influences on the distribution of income in California," Economic Review, Federal Reserve Bank of San Francisco, pages 1-13.
    37. repec:bla:econom:v:44:y:1977:i:173:p:81-88 is not listed on IDEAS
    38. Sandstrom, Arne & Wretman, Jan H & Walden, Bertil, 1988. "Variance Estimators of the Gini Coefficient--Probability Sampling," Journal of Business & Economic Statistics, American Statistical Association, vol. 6(1), pages 113-119, January.
    39. Charles M. Beach & James Richmond, 1982. "Joint Confidence Bands for Lorenz Curves," Working Paper 485, Economics Department, Queen's University.
    40. Lerman, Robert I & Yitzhaki, Shlomo, 1985. "Income Inequality Effects by Income," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 151-156, February.
    41. Gary Burtless, 2003. "Has Widening Inequality Promoted or Retarded US Growth?," Canadian Public Policy, University of Toronto Press, vol. 29(s1), pages 185-202, January.
    42. Claudia Biancotti, 2006. "A polarization of inequality? The distribution of national Gini coefficients 1970–1996," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 4(1), pages 1-32, April.
    43. Reddy, Wenkateshwar K. & Findeis, Jill L., 1987. "Decomposition Of Income Distribution Among Farm Families," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 16(2), pages 1-9, October.
    44. Pundarik Mukhopadhaya, 2002. "The trend of welfare disparity among subgroups of population in Australia 1983-1984 - 1993-1994," Applied Economics, Taylor & Francis Journals, vol. 34(14), pages 1733-1741.
    45. Gardner, Bruce L, 1992. "Changing Economic Perspectives on the Farm Problem," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 62-101, March.
    46. Reddy, V. K. & Findeis, J. L. & Hallberg, M. C., 1988. "Determinants of Off-farm Labor Participation and Impacts on Income Distribution Among U.S. Farm Families," Miscellaneous Series 257745, Pennsylvania State University.
    47. Dubman, Robert, 2000. "Variance Estimation With USDA's Farm Costs and Returns Surveys and Agricultural Resource Management Study Surveys," Staff Reports 276685, United States Department of Agriculture, Economic Research Service.
    48. Pudney, Stephen, 1993. "Income and Wealth Inequality and the Life Cycle: A Non-parametric Analysis for China," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 8(3), pages 249-276, July-Sept.
    49. H. Frederick Gale, 1994. "Longitudinal Analysis of Farm Size over the Farmer's Life Cycle," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 16(1), pages 113-123.
    50. Graham Pyatt & Chau-nan Chen & John Fei, 1980. "The Distribution of Income by Factor Components," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 95(3), pages 451-473.
    51. Xu, Kuan, 2000. "Inference for Generalized Gini Indices Using the Iterated-Bootstrap Method," Journal of Business & Economic Statistics, American Statistical Association, vol. 18(2), pages 223-227, April.
    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. Vázquez, Ibán & Sineiro, Francisco & García, Ana Isabel, 2014. "Trayectorias de crecimiento de las explotaciones agrarias en la Cornisa Cantábrica," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 14(02), pages 1-32, December.
    2. Dingde Xu & Zhixing Ma & Xin Deng & Yi Liu & Kai Huang & Wenfeng Zhou & Zhuolin Yong, 2020. "Relationships between Land Management Scale and Livelihood Strategy Selection of Rural Households in China from the Perspective of Family Life Cycle," Land, MDPI, vol. 9(1), pages 1-15, January.
    3. Hisham S. El-Osta, 2020. "Life-Cycle and Its Impact on the Disparity in Economic Well-Being among U.S. Sole Proprietor Households: Evidence from Two National Surveys," Applied Economics and Finance, Redfame publishing, vol. 7(1), pages 1-14, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hisham S. El-Osta, 2020. "Life-Cycle and Its Impact on the Disparity in Economic Well-Being among U.S. Sole Proprietor Households: Evidence from Two National Surveys," Applied Economics and Finance, Redfame publishing, vol. 7(1), pages 1-14, January.
    2. Mishra, Ashok & El-Osta, Hisham & Gillespie, Jeffrey M., 2009. "Effect of agricultural policy on regional income inequality among farm households," Journal of Policy Modeling, Elsevier, vol. 31(3), pages 325-340, May.
    3. El-Osta, Hisham S. & Bernat, G. Andrew, Jr. & Ahearn, Mary Clare, 1995. "Regional Differences In The Contribution Of Off-Farm Work To Income Inequality," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 24(1), pages 1-14, April.
    4. Severini, Simone & Tantari, Antonella, 2014. "The contribution of different off-farm income sources and government payments to regional income inequality among farm households in Italy," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 3(2), pages 1-17, August.
    5. Erickson, Kenneth W. & Moss, Charles B. & Mishra, Ashok K., 2006. "Farm Wealth Inequality Within and Across States in the United States," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 35(2), pages 1-14, October.
    6. Hisham S. El‐Osta, 2010. "Inequality decomposition of farm family living expenditures and the role of the life cycle," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 70(2), pages 245-266, August.
    7. Severini, Simone & Tantari, Antonella, 2013. "The effect of the EU farm payments policy and its recent reform on farm income inequality," Journal of Policy Modeling, Elsevier, vol. 35(2), pages 212-227.
    8. I. Josa & A. Aguado, 2020. "Measuring Unidimensional Inequality: Practical Framework for the Choice of an Appropriate Measure," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 149(2), pages 541-570, June.
    9. Severini, Simone & Tantari, A., 2012. "How direct payments and their reform have affected farm income inequality in Italy?," 2012 First Congress, June 4-5, 2012, Trento, Italy 124099, Italian Association of Agricultural and Applied Economics (AIEAA).
    10. Korb, Penelope J. & Blank, Steven C. & Erickson, Kenneth W., 2004. "Profit Patterns In The U.S. And The West, 1992 And 1997: What County-Level Data Reveal," 2004 Annual Meeting, June 30-July 2, 2004, Honolulu, Hawaii 36253, Western Agricultural Economics Association.
    11. Heshmati, Almas, 2004. "A Review of Decomposition of Income Inequality," IZA Discussion Papers 1221, Institute of Labor Economics (IZA).
    12. Sahrbacher, Amanda, 2012. "Impacts of CAP reforms on farm structures and performance disparities: An agent-based approach," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 65, number 65.
    13. Maxim Pinkovskiy & Xavier Sala-i-Martin, 2009. "Parametric Estimations of the World Distribution of Income," NBER Working Papers 15433, National Bureau of Economic Research, Inc.
    14. Frank A. Cowell & Philippe Kerm, 2015. "Wealth Inequality: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 29(4), pages 671-710, September.
    15. Severini, Simone & Tantari, Antonella, 2015. "The distributional impact of agricultural policy tools on Italian farm household incomes," Journal of Policy Modeling, Elsevier, vol. 37(1), pages 124-135.
    16. Antonio Abatemarco & Massimo Aria & Sergio Beraldo & Michela Collaro, 2023. "Measuring Access and Inequality of Access to Health Care: a Policy-Oriented Decomposition," CSEF Working Papers 666, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    17. Rashida Haq, 1999. "Income Inequality and Economic Welfare. A Decomposition Analysis for the Household Sector in Pakistan," PIDE-Working Papers 1999:170, Pakistan Institute of Development Economics.
    18. Vladimir Hlasny, 2021. "Parametric representation of the top of income distributions: Options, historical evidence, and model selection," Journal of Economic Surveys, Wiley Blackwell, vol. 35(4), pages 1217-1256, September.
    19. Hisham S. El‐Osta & Ashok K. Mishra & Mitchell J. Morehart, 2007. "Determinants of economic well‐being among U.S. farm operator households," Agricultural Economics, International Association of Agricultural Economists, vol. 36(3), pages 291-304, May.
    20. Michał Brzeziński, 2013. "Parametric Modelling of Income Distribution in Central and Eastern Europe," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 5(3), pages 207-230, September.

    More about this item

    Keywords

    Consumer/Household Economics;

    Statistics

    Access and download statistics

    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:ags:arerjl:55705. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/nareaea.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.