6 MASS. EXPERIMENT STATION BULLETIN 405 



enough to live and pay off anything on their debts. On 26 percent of the farms 

 cash expenses were more than cash receipts. There was no relationship between 

 income and total liabilities. 



Table 4. — Frequency Distribution of Farms by Net Cash Receipts and 

 Total Liabilities, 272 Massachusetts Farms, 1940. 



*See section on Method of Study for definition of Cash Receipts and Cash Expenses. 



There are several methods of measuring income. Two others used here are: 

 labor income, which attempts to show what the operator received simply for his 

 labor; and cash receipts minus current cash expenses, which is net cash receipts 

 excluding expense for new machinery and permanent improvements. A com- 

 parison of these methods of measuring income is shown in Table 5. 



Table 5. — Comparison of the Distribution of Farms by Three Methods of 

 Measuring Income, 272 Massachusetts Farms, 1940. 



Size of Income (Dollars) 



Method of Measuring Income 



-501 or 

 below 



-500 

 to 



1- 

 500 



501- 

 1,000 



1,001 

 1 ,500 and over 



Average 



1,501 Income 



Number of Farms 



Net cash receipts 38 



Net cash receipts excluding cost of new 



machinery and permanent improvements 17 



Labor income 61 



Method 1 14 



Method 2 6 



Method 3 22 



47 



51 



48 

 36 



34 

 26 



Percent of farms 

 17 19 



96 



44 



35 



Dollars 

 955 



1,381 

 459 

 Percent 

 100 

 100 

 100 



Again assuming $500 to be a minimum which a farm family should have to 

 meet cash living expenses, low income appears to be a characteristic of from 34 

 to 61 percent of the farms. 



To measure the success which farmers have had in buliding up their capital 

 in the farm, a comparison should be made between net worth in total assets when 

 the farm was acquired and net worth in total assets when the survey was taken. 

 However, the only figure obtainable for net worth at the time the farm was ac- 

 quired was net worth in land and buildings, and even this was limited to pur- 

 chased farms since it was difficult to get those who inherited the farm to put a 



