Living conditions and subjective well-being of farmers - An ordered response analysis of regional differences and changes over time

The liberalisation of trade with building down of tariffs and quotas, and with subsequently lower output prices, has enforced considerable structural changes in the agricultural sector. In Norway, both naturally given factors such as climate and topography, and social conditions such as a tradition for small family farms and strong governmental regulations, contribute in making this process even harder on the individual farmer. So how do the farmers respond? National farm statistics show that the amount of cultivated land stays approximately the same even though the number of farm units and agricultural employment falls annually. This implies that both farm size and productivity have increased. In this paper we utilise sample survey data on living conditions in agricultural households to examine whether we can observe changes in farmers ’experienced utility. Have contentment dropped and are there any obvious regional differences in contentment? The data consists of non-overlapping cross-sections for the years 1995 and 2002 and we make use of a standard ordered probability model in the estimations.