LIST OF TABLES Table A. Stages in development of farm operator level-of- 11 Figure 3. Change in rank of counties on farm operator level-of-living indexes, 1950-1959 Figure 4. Economic subregions and State economic areas: 1960 27 28 FARM OPERATOR LEVEL-OF-LIVING INDEXES, 1950 AND 1959 By James D. Cowhig Farm Population Branch Economic and Statistical Analysis Division INTRODUCTION In 1947, the U. S. Department of Agriculture published farm operator level-of-living indexes for the counties of the United States in 1940 and 1945. 1/ The development of these indexes was initiated by Margaret Jarman Hagood who was also responsible for the continuation of the research and the preparation of farm operator level-of-living indexes for 1930, 1940, 1954, and 1959. (See: Related Reports). All of the previously published reports on farm operator level-ofliving indexes were based on a U. S. county average of 100 in 1945. The previous index formula included four variables: (1) percentage of farms with electricity, (2) percentage of farms with telephone, (3) percentage of farms with automobiles, and (4) average value of products sold or traded per farm. By 1959 electricity had become almost universal on U. S. farms and no longer distinguished between counties with varying levels of living. It was necessary, therefore, to develop a new formula for the construction of a new farm operator level-of-living index. The indexes presented in this bulletin are not comparable with any previously published indexes. Five items were included in the new farm operator level-of-living index formula: (1) average value of sales per farm, (2) average value of land and buildings per farm, (3) percentage of farms with telephones, (4) percentage of farms with home freezers, and (5) percentage of farms with automobiles. As explained below, weights for these items were derived through a factor analysis of data from the 1959 census of agriculture. These weights were then applied to data from both the 1959 and 1950 censuses of agriculture. Weights for dollar figures for 1950 were adjusted for changes in price levels. 1/ Rural level-of-living indexes for counties of the U. S. were published in 1943. The advice of Harold Hotelling was followed in selecting the methods used in the construction of these indexes. See Harold Hotelling. "Analysis of a complex of statistical variables into principal components." Journal of Educational Psychology, Vol. 24 (1933) pp. 417-41 and 498-520. In the following pages, indexes for 1959 and 1950 are presented for 2,599 counties or combinations of counties and for all States except Hawaii. 2/ Indexes are not shown for counties which (1) were completely urban in 1959, (2) reported no farms in 1959, or (3) presented special problems of enumeration of farms. Farm operator level-of-living indexes are shown also for States, geographic divisions, regions, and State economic areas. The base year for the index is 1959, and the index is designed to measure the relative position of counties in 1959 and to show changes in level of living between 1950 and 1959. THE CONCEPT AND ITS MEASUREMENT The concept of "level of living" refers to the actual living conditions of a population. It differs from the concept "standard of living" which relates to the living conditions aspired to and which are regarded as proper or desirable. The most comprehensive statement of the conceptual and methodological problems involved in the measurement of level of living is contained in United Nations publications. 3/ The components of level of living discussed include health, food and nutrition, education, conditions of work, employment situation, aggregate consumption and savings, transportation, housing, clothing, recreation and entertainment, social security, and human freedoms. 47 The reports emphasize that the concept should include assessments of physical well-being and the satisfaction of material needs and wants. The reports stress also that nonmaterial factors should be considered, and that the satisfaction of cultural or educational wants, the enjoyment of art, music, and political rights are significant in the interpretation of comparative levels of living. There is a wide gap between the data required to measure the many components of level of living and the data actually available. In the absence of complete and detailed information on level of living, the problem is to use available data to develop a measure which contains components directly related to, or importantly associated with, level of living. 2/ Since information on value of land and buildings was not obtained for Hawaii in the 1959 census of agriculture, indexes could not be computed for that State for 1959. (See the section on Procedures.) 3/ Report on International Definition and Measurement of Standards and Levels of Living. United Nations, New York, 1954 and Report on International Definition and Measurement of Standards and Levels of Living. An Interim Guide. United Nations, New York, 1961. A basic consideration in the development of the 1959 level-of-living index formula was that relevant information be available for each county of the U. S. at frequent intervals. This requirement meant that major reliance be placed on data from the quinquennial censuses of agriculture. These censuses are the only source of nationwide information in the detail required for the computation of farm operator level-of-living indexes at the county level. Availability of this information at 5-year intervals also provides continuity in the series. An additional limitation was entailed in the attempt to supply comparable indexes for 1950. Thus, it was necessary to limit the items included in the index to those for which data were available from both the 1959 and 1950 censuses of agriculture. The nature and scope of census data meant that the items to be included in the index were limited to those concerning the possession of facilities which were of obvious social and economic importance to the farm operator, or to measures of the economic position of the farm operator. For example, the possession of an automobile by a farm operator makes accessible certain amenities which would not otherwise be available. Measures of the economic position of the farm operator, gross as they are, supply some evidence as to the amount of total farm income in a specific year, and also indicate something about the value of capital accumulated over time. In addition to the limitations of available data, several other consideration should be kept in mind: (1) No information was available on the number of facilities per farm. (2) No data were available on the quality of specified facilities or service. This is particularly important in the measurement of changes over time. For example, improvements in the quality of telephone service, of automobiles or of home freezers, could not be considered. (3) Each of the items refers to some material aspect of life. It was not possible to consider subjective states, such as happiness or wellbeing; nor was it feasible to include data on more objective considerations such as employment status, non farm income, or other characteristics. (4) The index is an example of intensive measurement and is nonadditive; it is an ordinal, not an interval, scale. It is proper to compare the relative position of units on the index, or to compare the relative position of the same unit over time. Although it is correct to say that an index of 100 represents a higher level of living than an index of 50, it is not correct to say that an index of 100 represents a level of living "twice as high" as an index of 50. This limitation is not peculiar to the level-of-living index, but applies to all such measures. For example, it is not correct to say that the combined "intelligence" of two persons with IQ's of 75 is equal to the "intelligence of one person with an IQ of 150, or to say that an IQ of 150 represents "twice as much intelligence" as an IQ of 75. The absence of empirically determined units of measurement and of an equal interval scale make such statements invalid. |