Estimating the Opportunity Cost of Unpaid Farm Labor for U . S . Farm Operators

A farm operator household time-allocation model and data from the Farm Costs and Returns Survey and from other sources were used to derive off-farm wage equations for U.S. farm operators based on production region, size of farm, and farm type. These equations, in turn, were used to impute opportunity costs for farm operators' unpaid labor. Using this new method, instead of the ad hoc method of valuing labor at hired labor wage rates, should improve the structure of conmiodity cost and return statements, including those developed by the U.S. Department of Agriculture.