Externalities in Rural Development : Evidence for China

The author tests for external effects of local economic activity on consumption and income growth at the farm-household level using panel data from four provinces of post-reform rural China. The tests allow for non-stationary fixed effects in the c...

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Bibliographic Details
Main Author:	Ravallion, Martin
Format:	Policy Research Working Paper
Language:	English en_US
Published:	2014
Subjects:	RURAL DEVELOPMENT RURAL ECONOMIC DEVELOPMENT CONSUMPTION GROWTH INCOME GROWTH FARM INCOME HOUSEHOLD WELFARE INDICATORS GEOGRAPHIC VARIABLES HUMAN CAPITAL PHYSICAL INFRASTRUCTURE AGRICULTURAL DEVELOPMENT ADVERSE SELECTION AGRICULTURAL GROWTH AGRICULTURAL PRODUCTIVITY AGRICULTURE BASIC EDUCATION CAPITAL MARKET CLIMATIC CONDITIONS CROWDING DATA MODEL DATA SET DEFLATORS DESCRIPTIVE STATISTICS DEVELOPING COUNTRIES DEVELOPING WORLD DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DEVELOPMENT RESEARCH DIVERSIFICATION ECONOMETRIC MODEL ECONOMETRICS ECONOMIC ACTIVITIES ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC EFFICIENCY ECONOMIC GROWTH ECONOMIC PROGRESS ECONOMIC REFORMS ECONOMIC REVIEW ECONOMIC STATISTICS ECONOMIC STUDIES ECONOMIC THEORY ECONOMIC TRANSFORMATION EMPIRICAL LITERATURE EMPIRICAL RESULTS EMPIRICAL WORK EMPLOYMENT ERROR TERM EXPENDITURES EXPLANATORY VARIABLES EXTERNALITIES EXTERNALITY FISHING FIXED EFFECTS FOOD POLICY RESEARCH FORESTRY GEOGRAPHIC POVERTY TRAPS GROWTH MODEL GROWTH PROCESS GROWTH PROSPECTS GROWTH RATE GROWTH RATES GROWTH REGRESSION GROWTH REGRESSIONS HEALTH CARE HEALTH INDICATORS HORIZONTAL EQUITY HOUSEHOLD INCOME IMPERFECT CREDIT IMPERFECT INFORMATION INCOME INCOME DATA INCOME EFFECT INCOME GROWTH RATE INCOME SOURCE INCOME SOURCES INCOMES INCOMPLETE MARKETS INCREASING RETURNS INDUSTRIAL DEVELOPMENT INDUSTRIALIZATION INEFFICIENCY INEQUALITY INFANT MORTALITY INSURANCE LABOR MARKETS LAGGED VALUES LIVING STANDARDS LONG-RUN GROWTH MARGINAL PRODUCT MARGINAL PRODUCTS MARKET IMPERFECTIONS MEAN INCOME MEAN INCOMES MEASUREMENT ERRORS MICRO DATA MICRO MODEL NEGATIVE EXTERNALITIES NETWORK EXTERNALITIES 0 HYPOTHESIS POLICY CIRCLES POLICY POINT OF VIEW POLITICAL ECONOMY POOR AREAS POOR COUNTRIES POSITIVE EFFECT POSITIVE EFFECTS POSITIVE EXTERNALITIES POVERTY LINE POVERTY LINES POVERTY REDUCTION PRIVATE AGENTS PRODUCTIVE ASSETS PRODUCTIVITY PROPERTY RIGHTS PUBLIC ECONOMICS PUBLIC GOODS PUBLIC POLICY RAPID GROWTH RURAL INFRASTRUCTURE SAVINGS SERIAL CORRELATION SERIAL INDEPENDENCE SPILLOVERS STANDARD DEVIATION STREAMS THEORETICAL MODELS WEALTH
Online Access:	http://documents.worldbank.org/curated/en/2002/08/1997764/externalities-rural-development-evidence-china http://hdl.handle.net/10986/19268

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Summary:	The author tests for external effects of local economic activity on consumption and income growth at the farm-household level using panel data from four provinces of post-reform rural China. The tests allow for non-stationary fixed effects in the consumption growth process. Evidence is found of geographic externalities, stemming from spillover effects of the level and composition of local economic activity and private returns to local human and physical infrastructure endowments. The results suggest an explanation for rural underdevelopment arising from under-investment in certain externality-generating activities, of which agricultural development emerges as the most important.

Externalities in Rural Development : Evidence for China

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