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Abstract

This paper investigates the existence of neighborhood effects in farm income in rural Korea. A farm-level income survey data set combined with the data on regional characteristics is used to identify and estimate the neighborhood effects. It is shown that the neighborhood effects exist for farm agricultural income, off-farm income, and overall farm income. That is, the effects are identified for every major component of farm income. It is estimated that the multipliers including the feedback effects of income change are 1.081, 1.119 and 1.145 for agricultural income, off-farm income, and overall farm income, respectively. Hence, the neighborhood effects are the largest for off-farm income. Moreover, we identify and estimate the contributions of various individual farm characteristics, regional characteristics and neighborhood characteristics incorporating the feedback effects existing among farms.

This paper investigates the existence of neighborhood effects in farm income in rural Korea. A farm-level income survey data set combined with the data on regional characteristics is used to identify and estimate the neighborhood effects. It is shown that the neighborhood effects exist for farm agricultural income, off-farm income, and overall farm income. That is, the effects are identified for every major component of farm income. It is estimated that the multipliers including the feedback effects of income change are 1.081, 1.119 and 1.145 for agricultural income, off-farm income, and overall farm income, respectively. Hence, the neighborhood effects are the largest for off-farm income. Moreover, we identify and estimate the contributions of various individual farm characteristics, regional characteristics and neighborhood characteristics incorporating the feedback effects existing among farms.