Vol. 5 No. 1 (2016)
Full Research Articles

The instability of farm income. Empirical evidences on aggregation bias and heterogeneity among farm groups

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  • Simone Severini,
  • Antonella Tantari,
  • Giuliano Di Tommaso
Simone Severini
Università degli Studi della Tuscia
Antonella Tantari
Università degli Studi della Tuscia
Giuliano Di Tommaso
Università degli Studi della Tuscia
DOI: https://doi.org/10.13128/BAE-16367

Published 2016-04-13

Keywords

  • farm income,
  • income instability and variability,
  • aggregation bias,
  • farm heterogeneity

How to Cite

Severini, S., Tantari, A., & Di Tommaso, G. (2016). The instability of farm income. Empirical evidences on aggregation bias and heterogeneity among farm groups. Bio-Based and Applied Economics, 5(1), 63–81. https://doi.org/10.13128/BAE-16367
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Abstract

This paper analyses the instability of farm income experienced by a constant sample of Italian farms over the period 2003-2012. It assesses the extent of the aggregation bias due to the use of aggregated vs. single farm data and estimates the level of farm income variability in several groups of farms for the whole period and for two sub-periods. Differences between groups and periods are assessed by means of non-parametric tests. Results suggest that analyses based on aggregated farm data are likely going to strongly underestimate the extent of income variability faced by farmers. Income variability levels differ among farm groups and have significantly increased over the considered time. This has policy implications regarding the risk management tools recently introduced within the Rural Development Policies and how these should be targeted on the farms that more need them.

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