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Household Income Volatility in U.S. Farm Households

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  • Key, Nigel
  • Prager, Daniel
  • Burns, Christopher

Abstract

Farm households are subject to several sources of income instability, including yield and production fluctuations, disasters such as droughts or disease, input and output price changes, and varying levels of off-farm income. This paper assesses the income variability of households operating family farms in the continental United States. We find that income volatility varies between farm household subgroups, such as farm size, commodity specialization, and geographic location and that volatility has decreased between 1998 and 2010. Regression analysis shows that households operating crop farms, larger farms, and more highly leveraged farms have higher levels of volatility. Finally, we decompose the sources of income variance and analyze the role of federal agricultural program payments in reducing volatility.

Suggested Citation

  • Key, Nigel & Prager, Daniel & Burns, Christopher, 2015. "Household Income Volatility in U.S. Farm Households," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205407, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea15:205407
    DOI: 10.22004/ag.econ.205407
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    References listed on IDEAS

    as
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    4. Enjolras, Geoffroy & Capitanio, Fabian & Aubert, Magali & Adinolfi, Felice, 2012. "Direct payments, crop insurance and the volatility of farm income. Some evidence in France and in Italy," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122478, European Association of Agricultural Economists.
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    Keywords

    Agricultural and Food Policy; Consumer/Household Economics; Risk and Uncertainty;
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