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THE ANALYSIS OF NET FARM INCOME: AN EXAMINATION OF FARM MANAGEMENT SURVEY DATA
Author(s) -
Britton D. K.
Publication year - 1970
Publication title -
journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.157
H-Index - 61
eISSN - 1477-9552
pISSN - 0021-857X
DOI - 10.1111/j.1477-9552.1970.tb01390.x
Subject(s) - salary , net income , profitability index , economics , survey data collection , investment (military) , net farm income , farm income , passive income , business , econometrics , agricultural science , labour economics , agricultural economics , statistics , gross income , mathematics , production (economics) , microeconomics , accounting , public economics , finance , environmental science , state income tax , tax reform , politics , political science , law , market economy
The practical significance of the conventional “net farm income” is elusive. It would be useful to have an accepted method of dividing “management and investment income” into its recognised Components—managerial salary and return on tenant's capital. One is a residual if the other can be calculated, and both alternatives are considered. An empirical formula is suggested for estimating the managerial salary which may be imputed to the farmer, taking account of his total turnover, his labour bill and his net farm income. This formula is then applied to Farm Management Survey data, for individual farms and for groups of average, high and low performance (output per £ input). The method may permit closer analysis of relative profitability.