Livelihood capitals on income inequality among rural households: evidence from China

Yang, Fan; Jiang, Yao; Zeng, Weizhong

doi:10.1590/0103-8478cr20190461

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AGRIBUSINESS • Cienc. Rural 50 (2) • 2020 • https://doi.org/10.1590/0103-8478cr20190461 linkcopy

Livelihood capitals on income inequality among rural households: evidence from China

Efeito das capitais de subsistência na desigualdade de renda entre as famílias rurais: evidências da China

Authorship SCIMAGO INSTITUTIONS RANKINGS

ABSTRACT:

We used the data of the China Labor-force Dynamics Survey 2014 to examine the effects of livelihood capitals which include natural, material, human, financial, and social capitals on total household income, per capita income, agricultural income, wage income, operational income, and property income inequality among rural households in China. Results showed that different kinds of livelihood capitals have different effects on different types of rural households’ income. Specifically; (1) although, the area of cultivated land reduces agricultural income inequality, it increases per capita income inequality. (2) Forest land area enlarges per capita income inequality and total household income inequality. (3) Tractor variable reduces inequality in agricultural income and total household income. (4) While reducing the property income inequality, education variable enlarges the wage income inequality, the per capita income inequality and the total household income inequality. (5) Book variable reduces property income inequality. (6) Loan variable increases inequality in agricultural incomes. (7) Party variable reduces the agricultural income inequality. (8) Although, the internet variable increases agricultural income inequality, and property income inequality, it reduces wage income inequality, operational income inequality, per capita income, and total household income inequality.

Key words:
human capital; social capital; Gini coefficient; poverty alleviation; China.

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Universidade Federal de Santa Maria Universidade Federal de Santa Maria, Centro de Ciências Rurais , 97105-900 Santa Maria RS Brazil , Tel.: +55 55 3220-8698 , Fax: +55 55 3220-8695 - Santa Maria - RS - Brazil
E-mail: cienciarural@mail.ufsm.br

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[TFN1] Note: The data in this table are calculated by authors. SD = standard deviation. CPC is the abbreviation of the Communist Party of China.

Variable	--------------------------------------------------Description---------------------------------------------	Mean	SD
--------------------------------------------------------------------------Dependent variable-------------------------------------------------------------------		Mean	SD
Income1	Log of rural household total income in 2015	10.039	1.219
Income2	Log of per capita income of rural household in 2015	8.397	1.245
Income3	Log of agricultural income of rural household in 2015	8.934	1.305
Income4	Log of wage income of rural household in 2015	10.221	1.092
Income5	Log of operational Income of rural household in 2015	10.076	1.370
Income6	Log of property income of rural household in 2015	8.240	1.367
---------------------------------------------------------------------------Natural capital-----------------------------------------------------------------------		8.240	1.367
Cultivated land	Per capita effective irrigation area (hectare)	1.416	3.169
Forest land	Per capita forest land area (hectare)	0.387	2.118
--------------------------------------------------------------------------Material capital-----------------------------------------------------------------------		0.387	2.118
Tractor	If a rural household has a tractor or more (1 = yes, 0 = no)	0.132	0.339
Implement	If a rural household has a large farm implement or more (1 = yes, 0 = no)	0.021	0.145
Livestock	If a rural household has a livestock (like cow, horse, mule, donkey) used for production or more (1 = yes, 0 = no)	0.081	0.273
--------------------------------------------------------------------------Human capital------------------------------------------------------------------------		0.081	0.273
Education	Ratio of adult working members with a junior college level education to total adult household members	0.044	0.103
Book	Number of books a rural household has	7.436	13.272
-------------------------------------------------------------------------Financial capital-----------------------------------------------------------------------		7.436	13.272
Financial product	If a rural household owns financial product, like stock, fund, or bond (1 = yes, 0 = no)	0.014	0.116
Loan	Did a rural household successfully borrow money from regular financial institutions such as banks or credit unions for productive investment? (1 = yes, 0 = no)	0.013	0.113
--------------------------------------------------------------------------Social capital--------------------------------------------------------------------------		0.013	0.113
Party	Are there any CPC members in household members? (1 = yes, 0 = no)	0.160	0.367
Internet	Can the internet be used by computer or smart phone at home? (1 = yes, 0 = no)	0.436	0.500
-----------------------------------------------------------------------------Other variables---------------------------------------------------------------------		0.436	0.500
Soil pollution	Severity of soil pollution of a rural household (From 1 to 4, the degree of pollution is getting lighter gradually)	3.455	0.694
Cost	Log of total cost of agricultural production	7.894	1.475
Labor	Ratio of agriculturally labor working members to total family members	0.377	0.298
Family size	Number of household members	6.080	3.516
Relationship	Relationship between family members (From 1 to 10, the relationship of family members is getting closer gradually)	7.177	1.573
Province	Province in which a rural household is located	--	--

	Western provinces	Central provinces	Eastern provinces	Entire study area
-------------------------------------------------------------------------FGT poverty index--------------------------------------------------------------------
Breadth of poverty (H)	0.282	0.235	0.185	0.228
Depth of poverty (PG)	0.175	0.153	0.127	0.148
Intensity of poverty (SPG)	0.125	0.118	0.102	0.113
Gini coefficient	0.546	0.527	0.533	0.549
Theil index	0.514	0.444	0.451	0.496

Variables	Q25	Q50	Q75
Cultivated_land	0.013	0.003	0.009
	(0.009)	(0.007)	(0.007)
Forest_land	0.008	0.016^*	0.022^**
	(0.012)	(0.010)	(0.010)
Tractor	0.110^*	0.066	-0.022
	(0.060)	(0.051)	(0.050)
Implement	0.156	0.160	0.070
	(0.130)	(0.111)	(0.108)
Livestock	-0.285^***	-0.332^***	-0.264^***
	(0.073)	(0.063)	(0.061)
Education	0.348	0.350	0.549^**
	(0.274)	(0.234)	(0.227)
Book	0.006^***	0.007^***	0.005^***
	(0.002)	(0.002)	(0.002)
Financial_product	-0.157	-0.239	0.229
	(0.230)	(0.196)	(0.191)
Loan	-0.060	-0.013	0.006
	(0.178)	(0.152)	(0.148)
Party	0.047	0.044	0.016
	(0.064)	(0.055)	(0.053)
Internet	0.709^***	0.569^***	0.374^***
	(0.049)	(0.042)	(0.041)
Soil_pollution	-0.005	-0.029	-0.020
	(0.034)	(0.029)	(0.028)
Cost	0.220^***	0.172^***	0.135^***
	(0.017)	(0.014)	(0.014)
Labor	-0.406^***	-0.288^***	-0.074
	(0.103)	(0.088)	(0.086)
Family_size	0.024^***	0.042^***	0.071^***
	(0.009)	(0.008)	(0.007)
Relationship	0.063^***	0.063^***	0.045^***
	(0.015)	(0.013)	(0.013)
Central_provinces	0.110^***	0.090^***	0.067^***
	(0.029)	(0.025)	(0.024)
Eastern_provinces	0.093^***	0.091^***	0.078^***
	(0.019)	(0.016)	(0.015)
Constant	6.605^***	7.704^***	8.553^***
	(0.216)	(0.184)	(0.179)
Observations	----------------------------------------------4,306----------------------------------------------

Variables	Q25	Q50	Q75
Cultivated_land	0.020^**	0.010	0.023^***
	(0.008)	(0.007)	(0.007)
Forest_land	0.002	0.020^**	0.024^**
	(0.011)	(0.009)	(0.010)
Tractor	0.077	0.041	-0.034
	(0.059)	(0.048)	(0.051)
Implement	0.114	0.097	0.025
	(0.128)	(0.105)	(0.111)
Livestock	-0.273^***	-0.370^***	-0.285^***
	(0.073)	(0.059)	(0.063)
Education	0.349	0.280	0.537^**
	(0.270)	(0.221)	(0.235)
Book	0.005^***	0.006^***	0.005^***
	(0.002)	(0.002)	(0.002)
Financial_product	-0.234	-0.307^*	0.043
	(0.227)	(0.185)	(0.197)
Loan	0.031	-0.027	0.108
	(0.176)	(0.144)	(0.153)
Party	0.092	0.084	0.041
	(0.063)	(0.052)	(0.055)
Internet	0.649^***	0.499^***	0.320^***
	(0.048)	(0.039)	(0.042)
Soil_pollution	0.009	-0.025	-0.027
	(0.034)	(0.027)	(0.029)
Cost	0.197^***	0.165^***	0.122^***
	(0.017)	(0.014)	(0.015)
Labor	0.202^**	0.279^***	0.344^***
	(0.102)	(0.083)	(0.088)
Family_size	-0.107^***	-0.087^***	-0.067^***
	(0.009)	(0.007)	(0.008)
Relationship	0.066^***	0.064^***	0.050^***
	(0.015)	(0.012)	(0.013)
Central_provinces	0.116^***	0.110^***	0.076^***
	(0.029)	(0.024)	(0.025)
Eastern_provinces	0.104^***	0.112^***	0.094^***
	(0.018)	(0.015)	(0.016)
Constant	5.634^***	6.622^***	7.626^***
	(0.213)	(0.174)	(0.185)
Observations	---------------------------------------4,306------------------------------------------

Variables	Q25	Q50	Q75
Cultivated_land	0.018^**	0.011^*	0.007
	(0.008)	(0.007)	(0.008)
Forest_land	-0.005	0.020^**	0.019
	(0.011)	(0.010)	(0.012)
Tractor	0.348^***	0.290^***	0.247^***
	(0.052)	(0.044)	(0.055)
Implement	0.143	0.093	0.152
	(0.111)	(0.095)	(0.119)
Livestock	0.011	-0.039	-0.101
	(0.064)	(0.054)	(0.068)
Education	0.018	-0.081	-0.186
	(0.244)	(0.208)	(0.261)
Book	-0.000	-0.000	0.001
	(0.002)	(0.001)	(0.002)
Financial_product	-0.280	-0.042	0.076
	(0.210)	(0.179)	(0.225)
Loan	-0.154	0.012	0.279^*
	(0.154)	(0.131)	(0.165)
Party	0.099^*	0.111^**	0.045
	(0.058)	(0.050)	(0.062)
Internet	0.147^***	0.141^***	0.220^***
	(0.044)	(0.038)	(0.047)
Soil_pollution	0.055^*	0.036	0.047
	(0.031)	(0.026)	(0.033)
Cost	0.572^***	0.602^***	0.494^***
	(0.016)	(0.013)	(0.017)
Labor	0.189^*	0.153^*	0.225^**
	(0.105)	(0.089)	(0.112)
Family_size	0.003	0.006	0.003
	(0.009)	(0.007)	(0.009)
Relationship	0.024^*	0.018	0.024
	(0.014)	(0.012)	(0.015)
Central_provinces	0.064^**	0.013	-0.034
	(0.026)	(0.023)	(0.028)
Eastern_provinces	-0.002	-0.010	-0.026
	(0.017)	(0.014)	(0.018)
Constant	3.140^***	3.661^***	5.094^***
	(0.200)	(0.170)	(0.214)
Observations	-------------------------------------------3,513---------------------------------------------

Variables	Q25	Q50	Q75
Cultivated_land	-0.012	-0.001	-0.007
	(0.012)	(0.011)	(0.010)
Forest_land	0.000	0.006	0.012
	(0.014)	(0.013)	(0.012)
Tractor	-0.240^***	-0.052	-0.025
	(0.082)	(0.073)	(0.070)
Implement	-0.081	-0.263^*	-0.171
	(0.174)	(0.155)	(0.148)
Livestock	-0.173	-0.051	-0.152
	(0.113)	(0.100)	(0.096)
Education	0.551^*	0.822^***	1.019^***
	(0.335)	(0.298)	(0.285)
Book	0.004^*	0.004^*	0.004^*
	(0.002)	(0.002)	(0.002)
Financial_product	-0.203	-0.051	0.486^**
	(0.284)	(0.252)	(0.242)
Loan	-0.081	-0.129	0.150
	(0.269)	(0.239)	(0.229)
Party	-0.001	0.001	-0.030
	(0.079)	(0.070)	(0.067)
Internet	0.441^***	0.308^***	0.223^***
	(0.062)	(0.055)	(0.053)
Soil_pollution	-0.108^**	-0.083^**	-0.047
	(0.044)	(0.039)	(0.037)
Cost	0.029	0.026	0.056^***
	(0.022)	(0.020)	(0.019)
Labor	-0.523^***	-0.270^**	-0.135
	(0.135)	(0.120)	(0.115)
Family_size	0.029^**	0.044^***	0.067^***
	(0.011)	(0.010)	(0.010)
Relationship	0.030	0.030^*	0.023
	(0.020)	(0.018)	(0.017)
Central_provinces	0.080^**	0.079^**	0.076^**
	(0.039)	(0.035)	(0.033)
Eastern_provinces	0.079^***	0.108^***	0.098^***
	(0.024)	(0.022)	(0.021)
Constant	9.052^***	9.437^***	9.548^***
	(0.280)	(0.249)	(0.238)
Observations	-----------------------------------------------2,018-------------------------------------------

Variables	Q25	Q50	Q75
Cultivated_land	-0.031	0.032	-0.012
	(0.058)	(0.061)	(0.052)
Forest_land	0.211	-0.004	-0.018
	(0.186)	(0.196)	(0.165)
Tractor	0.272	0.022	-0.187
	(0.510)	(0.538)	(0.454)
Implement	1.130	0.259	-0.143
	(1.109)	(1.171)	(0.987)
Livestock	-0.664	-1.015	0.118
	(1.229)	(1.297)	(1.093)
Education	3.663^*	1.320	0.808
	(1.964)	(2.073)	(1.748)
Book	0.026^**	0.014	0.001
	(0.012)	(0.012)	(0.010)
Financial_product	-0.320	1.179	-0.464
	(1.476)	(1.558)	(1.313)
Loan	0.858	0.685	0.566
	(1.019)	(1.076)	(0.907)
Party	-0.355	-0.428	0.295
	(0.458)	(0.483)	(0.408)
Internet	-0.090	0.556	0.608^*
	(0.401)	(0.424)	(0.357)
Soil_pollution	0.256	-0.278	-0.197
	(0.240)	(0.253)	(0.213)
Cost	0.260^**	0.300^***	0.117
	(0.104)	(0.109)	(0.092)
Labor	0.917	0.737	0.216
	(1.078)	(1.138)	(0.959)
Family_size	0.009	0.007	0.050
	(0.069)	(0.073)	(0.061)
Relationship	-0.070	0.053	0.004
	(0.136)	(0.143)	(0.121)
Central_provinces	0.063	-0.099	0.032
	(0.270)	(0.285)	(0.240)
Eastern_provinces	-0.056	-0.425^***	-0.266^*
	(0.152)	(0.161)	(0.135)
Constant	3.998^***	6.296^***	8.643^***
	(1.442)	(1.522)	(1.283)
Observations	--------------------------------------------135-----------------------------------------------

Variables	Q25	Q50	Q75
Cultivated_land	0.003	0.004	0.002
	(0.049)	(0.034)	(0.027)
Forest_land	0.033	0.019	0.002
	(0.044)	(0.031)	(0.025)
Tractor	-0.071	-0.181	0.086
	(0.334)	(0.230)	(0.185)
Implement	-0.653	-0.360	-0.500^*
	(0.528)	(0.363)	(0.292)
Livestock	0.450	0.002	-0.608^***
	(0.404)	(0.278)	(0.223)
Education	-0.572	-0.510	-0.685
	(1.152)	(0.792)	(0.636)
Book	-0.002	-0.001	0.004
	(0.009)	(0.006)	(0.005)
Financial_product	0.812	0.217	-0.393
	(1.142)	(0.785)	(0.631)
Loan	0.335	0.254	0.117
	(0.597)	(0.410)	(0.329)
Party	-0.074	0.028	0.130
	(0.304)	(0.209)	(0.168)
Internet	0.707^***	0.463^***	0.203
	(0.252)	(0.173)	(0.139)
Soil_pollution	-0.208	-0.014	-0.097
	(0.161)	(0.110)	(0.089)
Cost	0.162^**	0.120^**	0.186^***
	(0.074)	(0.051)	(0.041)
Labor	0.129	-0.323	-0.619^*
	(0.605)	(0.415)	(0.334)
Family_size	0.058	0.044	0.019
	(0.047)	(0.032)	(0.026)
Relationship	-0.058	0.044	0.038
	(0.096)	(0.066)	(0.053)
Central_provinces	0.216	0.273^***	0.106
	(0.153)	(0.105)	(0.084)
Eastern_provinces	0.259^***	0.270^***	0.142^***
	(0.090)	(0.062)	(0.050)
Constant	7.596^***	7.759^***	8.911^***
	(1.104)	(0.759)	(0.610)
Observations	-------------------------------------------------376-------------------------------------------

	Income1	Income2	Income3	Income4	Income5	Income6
-------------------------------------------------------------------------Natural capitals-------------------------------------------------------------------------
Cultivated_land		Increased	Decreased
Forest_land	Increased	Increased
------------------------------------------------------------------------Material capitals-------------------------------------------------------------------------
Tractor	Decreased		Decreased
Implement
Livestock
-------------------------------------------------------------------------Human capitals-------------------------------------------------------------------------
Education	Increased	Increased		Increased		Decreased
Book						Decreased
------------------------------------------------------------------------Financial capitals------------------------------------------------------------------------
Financial_product
Loan			Increased
------------------------------------------------------------------------Social capitals------------------------------------------------------------------------
Party			Decreased
Internet	Decreased	Decreased	Increased	Decreased	Decreased	Increased