Savings of farmers: A cross-section analysis

Léon, Yves; Rainelli, Pierre

doi:10.1093/erae/3.4.501

Cited by 3 publications

(5 citation statements)

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“…Hamaker and Patrick studied saving behavior of small number of farmers in Indiana, while Spence and Mapp conducted a simulation study to investigate saving behavior of Oklahoma farmers and their household. In the international arena, Leon and Rainelli (1976) used data from French and Swiss farm accounts to study saving behavior of farmers. Most of these studies point out that irregular and unforeseeable financial needs, such as those arising from natural disasters, force farmers to save more than other households (non‐farm households).…”

Section: Background and Motives For Savingsmentioning

confidence: 99%

Factors affecting precautionary savings of self‐employed farm households

Mishra

Chang

2009

Agricultural Finance Review

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Purpose -The purpose of this paper is to empirically investigate the effects of farm income variability, farm size, and other socio-demographic characteristics on the precautionary saving behavior of farm households and to estimate the influences of the identified factors on the amount of savings by self-employed farm households. Design/methodology/approach -Using 2003 Agricultural Resource Management Survey (ARMS) data and a Double-Hurdle procedure, the likelihood and the amount of savings by farm households are estimated. Findings -An important empirical finding of this study is that variability in income plays an important role in explaining precautionary savings of US farm households. Findings suggest that farm households facing higher income risk save more and accumulate more wealth. It is indicated that several farm, operator, household, and demographic attributes contribute to the precautionary savings of farm households. In particular, results show that educational attainment by operator and spouses have positive impact on the decision to save. In addition, results from this study show that farms that specialize in cash grain are likely to have precautionary savings. Practical implications -Farm households today are virtually indistinguishable from non-farm households in their levels of income and diversity of employment. As a result, government policies that influence general economic conditions have much more profound impacts on farm families. Federal support of farm income warrants continued scrutiny. This paper shows that greater income uncertainty increases savings and wealth of farm households. Therefore, farm policies that reduce income variability or uncertainty will have an impact on precautionary savings and wealth of farm households. Originality/value -Several studies have investigated savings of households; however, these studies are limited to entire US population, older Americans, or non-self-employed individuals in the USA. Little is known about the savings behavior of self-employed US farm households owing to a lack of household survey data and because of the complex relationship between the farm household and farm business in terms of resource allocation (both capital and labor).

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Section: Background and Motives For Savingsmentioning

confidence: 99%

Factors affecting precautionary savings of self‐employed farm households

Mishra

Chang

2009

Agricultural Finance Review

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“…Another important difference between farm and non-farm households is how consumption is financed. Leon and Rainelli (1976) point out that farmers merge farm and household expenditures. In this sense, farmers use their gross income first to meet farm needs and only use the residual income for household spending (additional support for this view can be found in Coughenour, 1992;Milic-Czemiak, 1996).…”

Section: Farmer Vs Non-farmer Consumptionmentioning

confidence: 99%

“…Some studies have shown that farmers consume less than their non-farm neighbors (Brangeon and Jegouzo, 1995;Leon and Rainelli, 1976). However, others have suggested these consumption differences may result more from economic circumstances than from differences in consumption propensities (Trbanc, 1996).…”

Section: Farmer Vs Non-farmer Consumptionmentioning

confidence: 99%

“…While the same study also concludes that this results from lower total net incomes, one must be cautious when extending this finding to farmers. Leon and Rainelli (1976) studied U.S. farmers and conclude that savings should be viewed as an active process rather than a mere residual of consumption. For farmers, consumption may actually be a residual of income after savings and therefore lead to a higher tendency to save, even among those with lower incomes.…”

Section: Rural Vs Urban Savingsmentioning

confidence: 99%

“…Observed differences, as mentioned earlier, may result from confounding circumstances. As Leon and Rainelli (1976) point out, farmers frequently merge farm and household consumption. This occurs with respect to credit and savings as well.…”

Section: Beyond Hypothesis Testingmentioning

confidence: 99%

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Savings, credit card, and consumption patterns in rural Iowa

Roelfs¹

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Past studies of savings and consumption have provided detailed descriptions of consumer behaviors among many different study populations. However, these studies frequently do not examine the impacts of credit cards alongside these savings and consumption processes. In addition, these studies fail to account for how savings and spending have become transformed within a rural context. The few writings that do examine the effect of place assume that rural residents--particularly farmers in the Midwest--act more responsibly than their urban counterparts. This study examines rural savings and credit card behaviors in a rural context using parallel data from two statewide random samples in Iowa. I hypothesize that, contrary to popular belief, rural Iowa residents' and Iowa farmers' savings and credit card behaviors do not differ significantly from each other or from those of the general population.

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Income, Wealth, and the Economic Well-Being of Farm Households

Mishra¹,

El‐Osta²,

Morehart³

et al. 2002

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Savings of farmers: A cross-section analysis

Cited by 3 publications

References 0 publications

Factors affecting precautionary savings of self‐employed farm households

Factors affecting precautionary savings of self‐employed farm households

Savings, credit card, and consumption patterns in rural Iowa

Income, Wealth, and the Economic Well-Being of Farm Households

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