Measuring the American farm size distribution

Abstract

AbstractThis paper develops a measure of farm size as a share‐weighted sum of farm sizes, called the Share Weighted Size Index (SWSI), which introduces new evidence of farm consolidation from 1959 to 2017. Our Share Weighted Size Index provides more reasonable estimates of the entire farm size distribution than simple averages and is useful for comparing farm size across crops at one point in time or for comparing farm sizes for a given crop over time. Although previous measures have relied on confidential or hard‐to‐access farm‐level records, the Share Weighted Size Index is derived exclusively from publicly available Census of Agriculture data. Unlike average farm size, the Share Weighted Size Index reveals consistent evidence of rising farm size, the importance of returns to scale for most commodities, and the rising importance of specialization on a small number of crops within farms. Contrary to past studies that argued rising off‐farm wages increase farm size, we find evidence that proximity to off‐farm opportunities results in smaller farms.