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Table 3 Sources of variability of farm income in the whole sample and in the sub-groups of farms

From: Do CAP direct payments stabilise farm income? Empirical evidences from a constant sample of Italian farms

   Variance decompositiona Relative importance of income sources
Direct effects Indirect effects
p1 p2 p3 p12 p13 p23 REV/FI DP/FI EC/FI
Types of farming (TF): TF Mean Mean
 Specialist field crops 1 0.617 0.082 0.301 −0.026 0.294 0.028 2.84 0.81 2.65
 Specialist horticulture 2 0.699 0.006 0.296 −0.005 0.321 0.004 2.81 0.02 1.83
 Specialist permanent crops 3 0.688 0.045 0.267 −0.016 0.250 0.011 2.68 0.25 1.94
 Specialist grazing livestock 4 0.601 0.062 0.337 −0.035 0.263 0.005 2.29 0.46 1.74
 Specialist granivore 5 0.599 0.010 0.392 −0.006 0.562 0.008 4.07 0.19 3.26
 Mixed cropping 6 0.640 0.056 0.304 −0.027 0.293 0.028 3.08 0.45 2.52
 Mixed livestock and Mixed crops-livestock 7 0.605 0.055 0.340 −0.039 0.302 0.022 3.11 0.61 2.71
Economic size (ESU):
 Small (Classes 1, 2, 3)   0.648 0.047 0.305 −0.022 0.269 0.019 3.04 0.56 2.61
 Medium (Classes 4, 5, 6)   0.647 0.057 0.296 −0.024 0.282 0.014 2.58 0.38 1.96
 Large (Classes 7, 8)   0.583 0.038 0.379 0.009 0.486 −0.003 3.32 0.31 2.63
PSE level:
 No DP 0 0.698 0.000 0.302 0.000 0.328 0.000 2.83 1.83
 Low 1st 0.718 0.007 0.275 −0.002 0.289 0.004 2.97 0.07 2.04
 Low-Medium 2nd 0.664 0.034 0.302 −0.025 0.270 0.006 2.99 0.28 2.27
 Medium-High 3rd 0.625 0.055 0.319 −0.014 0.321 0.015 2.81 0.56 2.36
 High 4th 0.546 0.139 0.315 −0.059 0.251 0.040 2.19 1.00 2.19
Total sample   0.645 0.053 0.303 −0.022 0.288 0.015 2.75 0.43 2.18
  1. Variance decomposition and relative importance of the three considered income sources
  2. Source: Own elaborations on a constant sample of the whole Italian FADN farms, years 2003–2012
  3. aSubscripts 1, 2 and 3 refer to revenues, direct payments and external costs, respectively