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The effect of China's agricultural tax abolition on rural families' incomes and production

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  • Wang, Xiaxin
  • Shen, Yan

Abstract

This paper uses the rural household panel data collected by Research Center for Rural Economy to evaluate the impacts of China's agricultural tax abolition during 2004–2005 on farmers' income and production behavior. We find that the abolition of agricultural tax did not significantly affect agricultural production. The effects on input use and productivity are also found statistically insignificant. All these are consistent with the lump-sum property of the tax and imply little effect of the tax abolition on relaxing credit constraints to farmers. Finally, we find that the tax abolition did not increase farmers' net income significantly.

Suggested Citation

  • Wang, Xiaxin & Shen, Yan, 2014. "The effect of China's agricultural tax abolition on rural families' incomes and production," China Economic Review, Elsevier, vol. 29(C), pages 185-199.
    • Handle: RePEc:eee:chieco:v:29:y:2014:i:c:p:185-199
    DOI: 10.1016/j.chieco.2014.04.010
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    Cited by:

    1. Li, Ang & Wu, Jianguo & Zhang, Xueyao & Xue, Jianguo & Liu, Zhifeng & Han, Xingguo & Huang, Jianhui, 2018. "China’s new rural “separating three property rights” land reform results in grassland degradation: Evidence from Inner Mongolia," Land Use Policy, Elsevier, vol. 71(C), pages 170-182.
    2. Lu, Na & Villa, Kira M., 2018. "The effect of farming on rural household’s health: A natural experiment in China," 2018 Annual Meeting, August 5-7, Washington, D.C. 274441, Agricultural and Applied Economics Association.
    3. Ward, Patrick S., 2016. "Transient Poverty, Poverty Dynamics, and Vulnerability to Poverty: An Empirical Analysis Using a Balanced Panel from Rural China," World Development, Elsevier, vol. 78(C), pages 541-553.
    4. Amalavoyal Chari & Elaine M Liu & Shing-Yi Wang & Yongxiang Wang, 2021. "Property Rights, Land Misallocation, and Agricultural Efficiency in China [Misallocation, Selection and Productivity: A Quantitative Analysis with Panel Data from China]," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(4), pages 1831-1862.
    5. Shen, Zhiyang & Baležentis, Tomas & Chen, Xueli & Valdmanis, Vivian, 2018. "Green growth and structural change in Chinese agricultural sector during 1997–2014," China Economic Review, Elsevier, vol. 51(C), pages 83-96.
    6. Alexander RYMANOV, 2017. "Differential land rent and agricultural taxation," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 63(9), pages 421-429.
    7. Yuanying Chi & Yangmei Xu & Xu Wang & Feng Jin & Jialin Li, 2021. "A Win–Win Scenario for Agricultural Green Development and Farmers’ Agricultural Income: An Empirical Analysis Based on the EKC Hypothesis," Sustainability, MDPI, vol. 13(15), pages 1-21, July.
    8. Na Lu & Kira M. Villa, 2022. "Agricultural support and contaminated spillovers: The effects of agricultural water pollution on adult health in China," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(2), pages 788-821, June.
    9. Lopez, Rigoberto A. & He, Xi & De Falcis, Eleonora, 2017. "What Drives China’s New Agricultural Subsidies?," World Development, Elsevier, vol. 93(C), pages 279-292.

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    More about this item

    Keywords

    China; Agricultural tax; Income and production;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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