Crop Prices, Agricultural Revenues, and the Rural Economy

Weber, Jeremy and Wall, Conor and Brown, Jason and Hertz, Tom (2014): Crop Prices, Agricultural Revenues, and the Rural Economy. Forthcoming in: Applied Economic Perspectives and Policy

Abstract

U.S. policy makers often justify agricultural subsidies by stressing that agriculture is the engine of the rural economy. We use the increase in crop prices in the late 2000s to estimate the marginal effect of increased agricultural revenues on local economies in the U.S. Heartland. We find that $1 more in crop revenue generated 64 cents in personal income, with most going to farm proprietors and workers (59 percent) or nonfarmers who own farm assets (36 percent). The evidence suggests a weak link between revenues and nonfarm income or employment, or on population.

• Item Type: MPRA Paper
• Language: English
• Keywords: Agriculture, Crop Revenues, Rural Economy
• Subjects: J - Labor and Demographic Economics > J4 - Particular Labor Markets > J43 - Agricultural Labor Markets; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O13 - Agriculture ; Natural Resources ; Energy ; Environment ; Other Primary Products

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