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The Impact of Rural Taxation Reform on Farm Household Income


  • Cuiping Xu
  • Qinghua Shi
  • H. Holly Wang


In this study, the impact of Chinese rural taxation reform (RTR) on farm household income is investigated, using panel data collected from nearly 1,000 farm households in fifteen villages in the Yangtze river delta (YRD) area between 1995 and 2005. The results from fixed-effect regression show that RTR had a significant impact, increasing farmer income by 6.82 percent. This increase is much more than the direct income increase brought about by an exemption from the agricultural tax. When the dynamic impact of RTR on farm household income was examined, it was found that the most significant income increase occurred in the first three years after the execution of the new tax policy.

Suggested Citation

  • Cuiping Xu & Qinghua Shi & H. Holly Wang, 2009. "The Impact of Rural Taxation Reform on Farm Household Income," Chinese Economy, Taylor & Francis Journals, vol. 42(4), pages 75-90, July.
  • Handle: RePEc:mes:chinec:v:42:y:2009:i:4:p:75-90

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    Cited by:

    1. 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.

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