Rural income diversification patterns and their determinants in China
J. Zhaohttps://doi.org/10.17221/97/2013-AGRICECONCitation:Zhao J. (2014): Rural income diversification patterns and their determinants in China. Agric. Econ. – Czech, 60: 219-231.
The article investigates the major rural income diversification patterns and their determinants in the context of China. Based on the data from a rural household survey, we first categorize the rural income diversification patterns according to the industry and the location in which the income is generated. Then we apply a Bayesian multinomial probit model to examine the determinants of various types of the rural income diversification. The major results demonstrate that a larger family size stimulates households to undertake various income diversification patterns, but its effects are discounted by an unproductive population structure within the household. Another interesting discovery is that a rural household chooses its income diversification pattern by referring to the surrounding neighbourhood; when most farm families depend on off-farm activities to boost their income, the individual household is more likely to follow the surrounding households by participating in the off-farm or mixed income activities or to migrate out to earn its income.Keywords:
Bayesian multinomial probit, income generation, rural households