THE VARIABILITY OF NET FARM INCOME*

Abstract

The movements in, and variability of, net farm income over time have considerable impact on the agricultural sector. But variability of income is quite dificult to measure in a satisfactory and objective way. In this note, a previous study (by R. B. Jones) of the variability of net farm income is sunimarised and discussed. Following this, a different approach, involving the use of various time series, is considered. Although the period covered differs from that used by R. B. Jones, his general conclusions remain unaltered. However, the analysis does suggest a definite rise in relative variability since 1963–4. It is felt that the alternative method used has some advantages over the other methods, especially in enabling tests of significance to be used to assess if observed changes are significant, and if the basic underlying assumptions are tenable.