| This research applies dynamic panel data procedures to investigate causal relationships between farm expenditure, nonfarm earned and total income, and government payments in farming-dependent counties. A statistically significant positive relationship is found between farm expenditure and lagged total nonfarm income during the 1970s, and a significantly negative relationship is found during the 1980s, 90s, and 2000s. However, looking only at nonfarm earned income (excluding rents, interest, dividends, and royalties that may flow to non-locals), a positive causal relationship is observed, but only in the 1970s. There is no statistically significant relationship in more recent decades. These findings indicate that resource constraints may have been less binding during the 70s, possibly because of lower enrollments in farm programs. More recently, increased factor supply inelasticity may be interfering with export sector expansion positive spillover effects on other local sectors.;Key Words: farming-dependent counties, non-farm income, farm expenditures. |
