An Empirical Analysis of Agriculture in Economic Growth of North Carolina

Agriculture is an important sector in economic growth of North Carolina that contributes 19 percent of the state’s income and employs over 20 percent of the work force. Of the total population, 30 percent are living in rural North Carolina where income earnings, education level, and employment opportunities are low while poverty and unemployment rates are considerably high. Of 100 counties 85 are rural and agriculture is one of the significant employment sectors. The objective of this study is to examine the potential use of agricultural sector in the economic growth of North Carolina. County level data gathered from U.S. Bureau of Labor Statistics, USDA, and U.S. Census Bureau for the period of 2000 to 2010 are used for the study. A system of simultaneous equations is used for analysis. The results summarize that increasing income increases agricultural activities and vise versa. Thus, counties with high income levels are more capable of improving agriculture and counties with high gains through agriculture are more competent of improving income levels. Results highlight the importance of secured satisfactory level of income through agriculture to enhance economic growth.