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12 - The Impact of Village-Specific Factors on Household Income in Rural China

Published online by Cambridge University Press:  25 July 2009

By
Hiroshi Sato
Edited by
Björn A. Gustafsson ,
Li Shi  and
Terry Sicular
Hiroshi Sato
Affiliation:
Professor in the Graduate School of Economics Hitotsubashi University, Tokyo, Japan
Björn A. Gustafsson
Affiliation:
University of Gothenberg, Sweden
Li Shi
Affiliation:
Beijing Normal University
Terry Sicular
Affiliation:
University of Western Ontario
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Summary

Introduction

Setting the Agenda

In contrast to other chapters in this book that focus on the influence of individual and household factors on income inequality, this chapter places special emphasis on the impact of community on household income in rural China. The analytical focus is, first, on the significance of physical infrastructure, human capital, and social capital at the community level, and, second, on the role of public management and public policy at the local level. The estimation results of household income using a hierarchical linear model demonstrate that community-level variables have significant effects on household income, and their impact varies according to the type of community. Regarding public policy, the findings of this chapter suggest the importance of institution building to cultivate governing ability for rural cadres, to promote social stability, and to develop mechanisms to meet local needs for public services.

In the context of this chapter, the term “community level” refers to the administrative villages (xingzhengcun) that are at the lowest level of the party/governmental hierarchy (hereafter referred to as “village”). In relation to the main theme of the entire volume, this chapter focuses on the factors at the village level for two reasons, as follows.

First, by looking more closely at the influence of village characteristics we will be able to provide a fuller picture of the determinants of income inequality in rural China.

Type
Chapter
Information
Inequality and Public Policy in China , pp. 287 - 311
Publisher: Cambridge University Press
Print publication year: 2008

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