Shapley-Value Decomposition Analysis of Farm Household Income Inequality by Income Source in South Korea

Deungyong Heo

Journal of Rural Development/Nongchon-Gyeongje, 2018, vol. 41, issue 4

Abstract: This study analyzes the degree of contribution of income sources to the income inequality among farm households through the Shapley value decomposition of the Gini coefficient and suggests policy implications. Farm Household Economy Survey raw data from 2013 to 2017 are used for the analysis. As a result of mean equalized Shapley value decomposition, it would be effective to develop a policy that alleviates inequality in order of agricultural income, non-farm business income and sideline income if the government wants to reduce overall inequality in farm household income. On the other hand, as a result of zero Shapley value decomposition, it would be effective to develop a policy that mitigates the inequality in order of agricultural income, private subsidy and sideline income if the government wants to mitigate the contribution of each income source to inequality. Inequality of farm household income is basically a combination of various factors such as household population, environment, social, economic, and government policy factors. Therefore, the government needs to design farm household income inequality mitigation policy by income source through comprehensive consideration of these factors.

Keywords: Agricultural Finance; Farm Management (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:ags:jordng:330749

DOI: 10.22004/ag.econ.330749

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