Estimating and Forecasting Imputations in U.S. Agriculture’s Valued Added Accounts: The Case of Rent

Theodore Covey and Mitchell J. Morehart

No 132746, 2005 Agricultural and Rural Finance Markets in Transition, October 3-4, 2005, Minneapolis, Minnesota from Regional Research Committee NC-1014: Agricultural and Rural Finance Markets in Transition

Abstract: Explicit rental income is a market-determined measure of the income farmers pay for the rental services they receive as tenants living in dwellings owned by others. Imputed rental income measures the income farmers “pay” for the rental services they receive as tenants living in dwellings which the farm operation owns. It is “imputed” in that its value is not directly observable in the marketplace. Including imputed rental income when accounting for the farm sector’s value added increases the value of agricultural sector production and net farm income. The share of the value of agricultural sector production contributed by gross imputed rental value income is inversely related to the size of the farm operation. Both the income returns to farm business assets (ROA) and income returns to farm equity (ROE) are larger when omitting imputed rental income. However, including net imputed rental income stabilizes net farm income over time. Given that imputed rental income is a measure of economic activity rather than returns to farm business investment, the USDA does not include imputed rental income in its calculation of farm sector ROA and ROE.

Keywords: Agricultural Finance; Land Economics/Use (search for similar items in EconPapers)
Pages: 15
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/132746/files/Covey2005.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:nc2005:132746

DOI: 10.22004/ag.econ.132746

Access Statistics for this paper

More papers in 2005 Agricultural and Rural Finance Markets in Transition, October 3-4, 2005, Minneapolis, Minnesota from Regional Research Committee NC-1014: Agricultural and Rural Finance Markets in Transition Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().