Value-Added Agricultural Enterprises and Local Economic Performance

Proponents of value‐added agricultural enterprises (VAAE) argue for favorable government policies and funds to promote these industries as a local development strategy. Though regularly advocated at all levels of government, the beliefs regarding the benefits of VAAE to local economies merit empirical investigation. A county‐level analysis of the contiguous U.S. states for a ten‐year time period was used to evaluate the contribution of selected VAAE to county economic well‐being. The two‐stage least squares regression coupled with spatial econometric methods suggests that the support for these selected VAAE as a tool of local economic well‐being, measured using income and employment growth and change in poverty rates, is not well founded.