Agricultural subsidies on common prosperity: Evidence from the Chinese social survey

Based on the data from the Chinese Social Survey (CSS) of 13,359 interviewed farm households, the paper systematically evaluates the impact of agricultural subsidies on the farmers' common prosperity by measuring the development of common prosperity from the aspects of “comprehensive” prosperity and “universal” affluence. The research draws the following conclusions: (1) Agricultural subsidies significantly raises the per capita income level of rural households, reduces income inequality between households, contributes to “comprehensive” prosperity and “universal” affluence, and realizes the goal of common prosperity. Also, this paper uses 2SLS, LIML, GMM, replacement and combination of variables, simultaneous quantile regression, and exclusion of outliers to test the robustness of the baseline regression results, which remains robust after a series of tests. (2) The effect of agricultural subsidies on the farmers' common prosperity will show obvious heterogeneity phenomenon due to the differences in the natural conditions, economic development level, policy environment and agricultural business scale of the region, which need to be treated differently. (3) The transfer of agricultural land plays a mediating role. Agricultural subsidies will encourage farmers to enhance the transfer of agricultural land, thereby raising incomes and reducing income inequality, which will help farmers to realize common prosperity. Part-time farming plays a moderating role. The lower the degree of part-time farming, the stronger the effect of agricultural subsidies in promoting the common prosperity of farmers. Our study gives innovative experience and ideas for improving the agricultural subsidy policy system, optimizing the structure of agricultural subsidies, and then using agricultural subsidies to more comprehensively promote common prosperity in rural areas.