Table 6. — Components of changes in income and costs effecting land rent 

 change from prior to flue-cured tobacco programs to 1960, North Carolina 



and Virginia 







Effect 



on 



change in 





Component of Change 





land rent 



per 



acre 1/ 







North Carolina 







Virginia 









Dollars 







Independent components: : 















Increase in yield per acre (+ [Ayr])-: 



36 









10 





Increase in price per pound (+ [Apy] ) : 



271 









230 





Increase in returns per hour of 















labor (- [Awyl] ) 



-287 









-309 





Decrease in labor required per pound 















of tobacco produced (- [Alwy] ) - - 



33 









32 





Increase in overhead and operating 















cost per pound (- [Aky] )_____ 



-64 









-53 





Interaction components ; 















Increase in returns per hour of labor 















and decrease in labor required per 















pound (- [AwAlyj ) 



109 









130 





Increase in yield and in rent per 















pound of tobacco (+[AyAr] )----- 



: 92 









48 





Total (Increase in land rent per 















acre) --------------- 



190 









88 





1/ Numbers rounded to nearest dollar. 



overhead and operating costs per pound. Unfortunately, such indirect effects 

 cannot be quantified. Nor can interaction effects be separated into indepen- 

 dent components depicting the contribution of each variable to the inter- 

 action. 



According to the results and rationale of this study, the magnitude of 

 all the components of changes in income and costs affecting land rent is 

 affected either directly or indirectly by the flue-cured tobacco programs. 

 Although the price of capital items is determined independently of the pro- 

 grams, as is the return to labor, the cost of these per pound of tobacco 

 produced is influenced by yields which are affected by the programs. 



Increases in yields and prices were the two major effects of the tobaaco 

 programs. It is not known how much yield or prices would have increased 

 during the period under study without the programs. However, an analysis of 

 the sensitivity of rent to yield and price changes will provide some informa- 

 tion on the relative magnitude of these two effects of the program. 



18 



