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Income Stabilization Through Government Payments: How is Farm Household Consumption Affected?

Published online by Cambridge University Press:  15 September 2016

James B. Whitaker  and
Anne Effland
James B. Whitaker
Affiliation:
Economic Research Service of the U.S. Department of Agriculture, in Washington, D.C.
Anne Effland
Affiliation:
Economic Research Service of the U.S. Department of Agriculture, in Washington, D.C.
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Abstract

We estimate the impacts of various types of government payments to U.S. agriculture on different components of farm household consumption. Using 2003 to 2005 data from the Agricultural Resource Management Survey (ARMS), we show that marginal rates of consumption differ by consumption category and income source, including different types of farm program payments. The results suggest that farm households treat income from different sources as imperfect substitutes and may reserve income from specific sources for specific types of consumption. Implications for the effects of different types of government payments on the farm household are considered.

Keywords

agricultural policyconsumptionfarm householdsgovernment payments
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 38 , Issue 1 , April 2009 , pp. 36 - 48
Copyright
Copyright © 2009 Northeastern Agricultural and Resource Economics Association 

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