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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.
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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 

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