An Index of Socio-Economic Well-Being of U.S. Farm Households


The primary purpose of the paper is to construct a combined index of quality-of-life and economic wellbeing based on national data from the 2004 Agricultural Resource Management Survey. Additional objective is to assess the role of increased utilization of various types of Federal farm programs in the context of the life-cycle on socioeconomic wellbeing. A central finding, which has implication for rural development and the continuity of the family farm, shows a positive relationship between increased intensity of farm program participation and higher likelihoods of socioeconomic wellbeing, particularly among elderly farmers.

Share and Cite:

El-Osta, H. (2014) An Index of Socio-Economic Well-Being of U.S. Farm Households. Modern Economy, 5, 1120-1131. doi: 10.4236/me.2014.512104.

Conflicts of Interest

The authors declare no conflicts of interest.


[1] Carlin, T.A. (1972) Farm Families Narrowed the Income Gap during the 1960’s. Agricultural Finance Review, 33, 22-26.
[2] Carlin, T.A. and Reinsel, E.I. (1973) Combining Income and Wealth: An Analysis of Farm Family Well-Being. American Journal of Agricultural Economics, 55, 38-44.
[3] Mishra, A.K., El-Osta H.S., M.J. Morehart, Johnson J.D. and Hopkins, J.W. (2002) Income, Wealth, and the Economic Well-Being of Farm Households. Agricultural Economic Report No. 812, Economic Research Service, U.S. Department of Agriculture, Washington DC.
[4] Houthakker, H.S. (1967) Economic Policy for the Farm Sector. American Enterprise Institute for Public Policy Research, Washington DC.
[5] Ahearn, M. (1986) An Income Comparison of Farm and Nonfarm People. In: New Dimensions in Rural Policy: Building upon Our Heritage, Joint Economic Committee of the U.S. Congress, 99th Congress, 2nd Session, 99-153.
[6] Offutt, S. (2000) Can the Farm Policy Problem Be Solved? M.E. Lecture, Pennsylvania State University.
[7] Bernanke, B. (2012) Economic Measurement. The 32nd General Conference of the International Association for Research in Income and Wealth, Cambridge, Massachusetts.
[8] Strickland, R.P. (1982) Alternative Indicators of Farm Operators’ Earnings. Agricultural Economics Research, 34, 28-33.
[9] El-Osta, H. and Morehart, M. (2009) Welfare Decomposition in the Context of the Life Cycle of Farm Operators: What Does a National Survey Reveal? Agricultural and Resource Economics Review, 38, 125-141.
[10] Boehlje, M. (1973) The Entry-Growth-Exit Processes in Agriculture. Southern Journal of Agricultural Economics, 5, 23-36.
[11] Boehlje, M. (1992) Alternative Models of Structural Change in Agriculture and Related Industries. Agribusiness, 8, 219-231.<219::AID-AGR2720080303>3.0.CO;2-T
[12] Gale Jr., H.F. (1994) Longitudinal Analysis of Farm Size over the Farmer’s Life Cycle. Review of Agricultural Economics, 16, 113-123.
[13] Gale Jr., H.F. (2003) Age-Specific Patterns of Exit and Entry in U.S. Farming, 1978-1997. Review of Agricultural Economics, 25, 168-186.
[14] National Agricultural Statistics Service (NASS) (2007) Census of Agriculture: Farmers by Age. National Agricultural Statistics Service.
[15] Whitener, L. and Parker, T. (2005) Policy Options for a Changing Rural America. Amber Waves, 5, 58-65.
[16] Robison, L.J. and Barry, P. (1987) The Competitive Firm’s Response to Risk. MacMillan Publishing Co., New York.
[17] Goodwin, B.K. (1993) An Empirical Analysis of the Demand for Multiple Peril Crop Insurance. American Journal of Agricultural Economics, 75, 425-434.
[18] Harwood, J., Heifner, R., Coble, K., Perry, J. and Somwaru, A. (1999) Managing Risk in Farming-Concepts, Research, and Analysis. Agricultural Economic Report No. 774. Economic Research Service, U.S. Department of Agriculture, Washington, DC.
[19] Barnard, C.H., Whittaker, G., Westenbarger, D. and Ahearn, M. (1997) Evidence of Capitalization of Direct Government Payments into U.S. Cropland Values. American Journal of Agricultural Economics, 79, 1642-1650.
[20] El-Osta, H. and Ahearn, M. (1996) Estimating the Opportunity Cost of Unpaid Farm Labor for US Farm Operators. Technical Bulletin No. 1848. Economic Research Service, U.S. Department of Agriculture, Washington DC.
[21] Ahearn, M.C., El-Osta, H. and Dewbre, J. (2006) The Impact of Coupled and Decoupled Government Subsidies on Off-Farm Labor Participation of U.S. Farm Operators. American Journal of Agricultural Economics, 88, 393-408.
[22] El-Osta, H., Mishra, A.K. and Ahearn, M.C. (2004) Labor Supply by Farm Operators under “Decoupled” Farm Program Payments. Review of Economics of the Household, 2, 367-385.
[23] Weisbrod, B.A. and Hansen, W.L. (1968) An Income-Net Worth Approach to Measuring Economic Welfare. American Economic Review, 58, 1315-1329.
[24] Daganzo, C. (1979) The Multinomial Probit: The Theory and Its Application to Demand Forecasting. Academic Press, New York.
[25] Bunch, D.S. (1991) Estimability in the Multinomial Probit Model. Transportation Research Part B: Methodological, 25, 1-12.
[26] White, T.K. and Hoppe, R.A. (2012) Changing Farm Structure and the Distribution of Farm Payments and Federal Crop Insurance. Economic Information Bulletin No. 91. Economic Research Service, U.S. Department of Agriculture, Washington, DC.
[27] Blundell, R., Griffith, R. and Van Reenen, J. (1995) Dynamic Count Data Models of Technological Innovation. The Economic Journal, 105, 333-344.
[28] Gourieroux, C., Monfort, A. and Trognon, A. (1984) Pseudo Maximum Likelihood Methods: Applications to Poisson Models. Econometrica, 52, 701-720.
[29] Cameron, A.C. and Trivedi, P.K. (1998) Regression Analysis of Count Data. Cambridge University Press, New York.
[30] Greene, W.H. (2002) Econometric Analysis. 5th Edition, Prentice Hall, Englwood Cliffs.
[31] El-Osta, H. (2007) The Determinants of a Quality of Life Indicator for Farm Operator Households: Application of Zero-Inflated Count-Data Models. Applied Research in Quality of Life, 2, 145-163.
[32] Long, J.S. (1997) Regression Models for Categorical and Limited Dependent Variables. Sage Publications, Inc., Thousand Oaks.
[33] Hausman, J., Hall, B.H. and Griliches, Z. (1984) Econometric Models for Count Data with an Application to the Patents-R & D Relationship. Econometrica, 52, 909-938.
[34] Lambert, D. (1992) Zero-Inflated Poisson Regression, with an Application to Defects in Manufacturing. Technometrics, 34, 1-14.
[35] Huber, P.J. (1967) The Behavior of Maximum Likelihood Estimates Under Nonstandard Conditions. In: Proceedings of the Fifth Berkeley Symposium on Mathematical Statistics and Probability, Volume 1: Statistics, University of California Press, Berkeley, 221-233.
[36] White, H. (1980) A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity. Econometrica, 48, 817-838.
[37] Huffman, W.E. (1980) Farm and Off-Farm Work Decisions: The Role of Human Capital. The Review of Economics and Statistics, 62, 14-23.
[38] Sumner, D (1982) The Off-Farm Labor Supply of Farmers. American Journal of Agricultural Economics, 64, 499-509.
[39] Marchant, M. (1997) Bargaining Models for Farm Household Decision Making: Discussion. American Journal of Agricultural Economics, 79, 602-604.
[40] Strickland, R.P. (1983) The Negative Income of Small Farms. Agricultural Economics Research, 35, 1, 52-55.
[41] Johnson, J. and Baum, K. (1986) Whole Farm Survey Data for Economic Indicators and Performance Measures. Agricultural Economics Research, 38, 1-13.
[42] Ando, A. and Modigliani, F. (1963) The “Life Cycle” Hypothesis of Saving: Aggregate Implications and Tests. American Economic Review, 53, 55-84.
[43] Modigliani, F. (1986) Life Cycle, Individual Thrift, and the Wealth of Nations. The American Economic Review, 76, 297-313.
[44] Mishra, A.K., El-Osta, H.S. and Shaik, S. (2010) Succession Decisions in U.S. Family Farm Businesses. Journal of Agricultural and Resource Economics, 35, 133-152.
[45] Sureshwaran, S. and Ritchie, S. (2011) U.S. Farm Bill Resources and Programs for Beginning Farmers. Choices, 26.
[46] Skolnik, A.M. (1952) Economic Security of Farm Operators. Social Security Bulletin, 15, 3-9, 21.

Copyright © 2022 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.