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Urban Bias, Rural-Urban Income Gap and Agricultural Growth: the Resource-Diverting Effect of Rural-Urban Income Gap in China

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  • Yanyan Gao

Abstract

Urban bias has long been China’s dominant economic policy. The persistent urban bias leads to a severe rural-urban income gap and diverts physical as well as an effect of diverting the rural resource out of agricultural sector, and thus is detrimental to agricultural growth. This paper uses China’s provincial panel data from 1978 to 2007 to investigate the diverting effects of the rural-urban income gap on agricultural growth. The empirical results suggest that the persistent rural-urban income gap caused by urban bias has produced strong current, but smaller lagged resource-diverting effects on agriculture. The further study shows that the diverting effect is decreasing over time and it is larger in the middle provinces than other provinces. The time and region patterns are confirmed to be a “U shape” relationship between the rural-urban income gap and agricultural growth.

Suggested Citation

  • Yanyan Gao, 2010. "Urban Bias, Rural-Urban Income Gap and Agricultural Growth: the Resource-Diverting Effect of Rural-Urban Income Gap in China," Monash Economics Working Papers 34-10, Monash University, Department of Economics.
    • Handle: RePEc:mos:moswps:2010-34
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    File URL: http://www.buseco.monash.edu.au/eco/research/papers/2010/3410urbangao.pdf
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    Citations

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    Cited by:

    1. You, Heyuan & Zhang, Xiaoling, 2017. "Sustainable livelihoods and rural sustainability in China: Ecologically secure, economically efficient or socially equitable?," Resources, Conservation & Recycling, Elsevier, vol. 120(C), pages 1-13.
    2. Jinkai Li & Jueying Chen & Heguang Liu, 2021. "Sustainable Agricultural Total Factor Productivity and Its Spatial Relationship with Urbanization in China," Sustainability, MDPI, vol. 13(12), pages 1-15, June.
    3. Chao Zhang & Ruifa Hu, 2020. "Does Fertilizer Use Intensity Respond to the Urban-Rural Income Gap? Evidence from a Dynamic Panel-Data Analysis in China," Sustainability, MDPI, vol. 12(1), pages 1-15, January.
    4. Qi Cai & Yushi Cai & Yali Wen, 2018. "Spatially Differentiated Trends between Forest Pest-Induced Losses and Measures for Their Control in China," Sustainability, MDPI, vol. 11(1), pages 1-16, December.
    5. Zhang, C. & Sun, Y. & Hu, R., 2018. "Does urban-rural income inequality increase agricultural fertilizer or pesticide use? A provincial panel data analysis in China," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277033, International Association of Agricultural Economists.
    6. Jing Chen & Cheng Wang & Ruilian Dai & Shuang Xu & Yue Shen & Mengzhu Ji, 2021. "Practical Village Planning Strategy of Different Types of Villages—A Case Study of 38 Villages in Shapingba District, Chongqing," Land, MDPI, vol. 10(11), pages 1-19, October.
    7. Gao, Yanyan & Zang, Leizhen & Sun, Jun, 2018. "Does computer penetration increase farmers’ income? An empirical study from China," Telecommunications Policy, Elsevier, vol. 42(5), pages 345-360.

    More about this item

    Keywords

    Urban Bias; Income Gap; Agricultural Growth; China;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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