THE EFFECTS OF INDUSTRIALIZATION ON THE FARM AND NONFARM INCOME DISTRIBUTIONS IN NEW ENGLAND

The objectives of this study are to measure the changes in the distribution of farm and nonfarm incomes over space and time, and to determine the factors that affect the farm income distribution.;The trend of changes in farm income increases from 1950 to 1959 and then decreases through 1974. Farm income inequality increases from 1950 to 1974 especially in the more urbanized counties. The trend of changes in nonfarm income increases at an increasing rate. Nonfarm income inequality decreases and nonfarm income grows faster in the more industrialized counties. The Gini decomposition analysis shows that the total income distribution in New England becomes more equal in recent years.;Increases in gross regional product and unemployment, and decreases in price levels are associated with increasing farm income inequality and a decreasing trend in farm income. Industrialization has a complementary effect on agriculture while growth of urbanization reduces the farm numbers mostly in the middle income classes. Because of the high industrial-urban development a unique relationship between the farm and nonfarm sectors has developed over time with the main characteristic being a U-shaped distribution of farms by income classes.;Lognormal and gamma density functions are used to examine spatial and temporal changes in farm and nonfarm incomes of the 65 counties of New England for each census year from 1950 through 1974. In estimating the parameters of the density functions the procedures of maximum likelihood, least squares and minimum chi-square are used. The analysis supports the hypothesis that farm income is lognormally distributed. Although the nonfarm income distribution is described better by the gamma than by the lognormal density, the large chi-square values reject the hypothesis that the nonfarm income is distributed as either gamma or lognormal.