Book Description

Financial stress in agriculture has been a concern over the past century. Agrarian values and "love of the land" seem to yield public conclusions for the support of the industry. Much of this support is in the interest of preserving a viable food producing sector in an volatile world climate. High interest rates, declining land values and highly competitive export markets have spurred renewed concern for farm survival in the past ten years. One alternative to traditional price supports and tariffs for farm household support is off-farm income. This may take many forms including off-farm wages and salaries, rental income, interest and dividend income and, retirement or pension funds. Central to the analysis of nonfarm income generation is the allocation of time by farm households. For farmers who place a high value on the farm lifestyle, occupational choice is embedded in the time decision to such an extent that the resource allocations based on economic efficiency criteria may be altered. Tobit techniques offer a new approach to the analysis of farm household decisions on time allocation. The procedure allows the investigator to estimate and evaluate parameters that may affect the amount of off-farm work by farm household members. The Tobit analysis is designed for censored data sets. The data in this study were censored because there were missing observations on the quantity of off-farm work for those individuals who did not work off-farm in 1986. Results of Tobit analyses of off-farm work by farm operators and spouses in three Oregon counties indicated that high levels of gross farm income reduce the likelihood and extent of off-farm work. Middle-aged operators worked off-farm more while the presence of small children and elderly dependents in the farm household inhibited off-farm work. The allocation decisions of the spouse and the operator appeared to be independent; this supports a nonsimultaneous Tobit specification like the one used in this research.