Abstract

We employed the propensity score matching and estimated the causal effect of being certified

organic crop producers on farm household income and its various components in the United

States. Contrary to the standard assumption in economic analysis, certified organic farmers do

not earn significantly higher household income than conventional farmers. Certified organic crop

producers earn higher revenue but they incur higher production expenses. In particular, certified

organic producers spend significantly more on labor expenses, insurance payments, and

marketing charges than conventional farmers. The results suggest that early adopters of organic

farmers have done so for non pecuniary reasons and the lack of economic incentives can be an

important barrier to conversion to organic farming in the United States...