On the comparative evaluation of agricultural income distributions in the European Union

Abstract

The paper reports a set of operational rules for ranking income distributions that could be used, given appropriate data, to address a range of policy issues concerning the economic welfare of the agricultural community, the comparability of agricultural and non-agricultural incomes, and the extent and depth of poverty in farming. The rules are based on stochastic dominance procedures and are consistent with social preferences for higher incomes and a more equal distribution of income. Their application is illustrated by means of a comparative analysis of the farm family income situation in the member states of the European Union based on Farm Accountancy Data Network (FADN) data. The inadequacy of FADN data as a basis for inferences about welfare and poverty of farm households is stressed. © Oxford University Press and Foundation for the European Review of Agricultural Economics 1999.