Farm and non-farm incomes of rural households in Slovenia: Canonical correlation analysis

This paper provides an analysis of socio-economic characteristics and their influence on farm and non-farm incomes of rural households in Slovenia. With the canonical correlation analysis we use a methodological approach that offers a true multivariate procedure for both sides of the equation. It thus goes beyond a simple pair-wise correlation analysis and also beyond multiple correlation analysis. This rather rarely used statistical method offers interesting insights into many fields of analytical applications. Our results confirm that rural households usually turn towards non-farm employment if distress-push factors prevail. Besides insufficient farm incomes, large household sizes push households into non-farm diversification. Employment opportunities in the non-farm sector- regardless of whether triggered by distress in the household or demand in the non-farm sector- depend strongly on education.