Economic Research Report No. (ERR-91) 48 pp

February 2010

Farm Household Well-Being: Comparing Consumption- and Income-Based Measures

Household economic well-being can be gauged by the financial resources (income/wealth) available to the household or by the standard of living enjoyed by household members (consumption). Based on responses to USDA's annual Agricultural Resource Management Survey (ARMS), a joint effort by the Economic Research Service (ERS) and the USDA National Agricultural Statistics Service, ERS has long published estimates of farm household income and wealth. This report presents, for the first time, estimates of consumption-based measures of well-being for farm households based on new questions in ARMS. The consumption measure provides a different perspective from income or wealth on farm households' well-being relative to that of all U.S. households.

Keywords: household consumption, household income, household well-being measures, farm households, self-employed households, permanent income, permanent income hypothesis

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