Income distribution characteristics of rural economic sectors: implications for local development policy

ABSTRACT Recent trends suggest increasing reliance on private markets to provide for local economic well‐being. This research demonstrates the study of regional household income distribution patterns associated with productive activities important to many rural areas. A social accounting matrix analysis was used to examine agricultural production, agricultural processing, forestry production, forest products processing, and tourism in a small rural region in Wisconsin to illustrate the variable distributional characteristics of private market structures and related local economic development policy. The results showed that while high income households comprised 22 percent of total regional households in the study area, they received between 57 percent and 63 percent of earned income associated with changes in sectoral factor income. Medium income households (34 percent of regional households) received between 32 percent and 41 percent of earned income, and low income households (44 percent) received between 2 percent and 6 percent. The ability of local policy to influence distributional patterns is implied to the extent that local action can facilitate variable growth rates of targeted economic sectors.