The Influence of the Grassland Ecological Compensation Policy on Regional Herdsmen’s Income and Its Gap: Evidence from Six Pastoralist Provinces in China

Mengmeng Liu, Limin Bai, Hassan Saif Khan and Hua Li ()
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Mengmeng Liu: College of Economics and Management, Northwest A&F University, Xianyang 712100, China
Limin Bai: College of Natural Resources and Environment, Northwest A&F University, Xianyang 712100, China
Hassan Saif Khan: College of Economics and Management, Northwest A&F University, Xianyang 712100, China
Hua Li: College of Economics and Management, Northwest A&F University, Xianyang 712100, China

Agriculture, 2023, vol. 13, issue 4, 1-16

Abstract: The Grassland Ecological Compensation Policy (GECP) is a key set of policy instruments designed to alleviate grassland degradation and increase herdsmen’s income. However, considering the various constraints and obstacles that policies often face in actual operation, it may not be able to achieve the expected goals. In order to test the real income effect of GECP and clarify its mechanism, based on the data of 499 counties in Chinese pastoralist provinces from 2000 to 2019, this paper uses the difference-in-differences (DID) model to empirically test the impact of GECP on herdsmen’s income from the dual perspective of income growth and income gap. This analysis not only evaluates the impact and mechanism of GECP on income growth in more detail, but also broadens the existing research perspective from the perspective of the income gap. The major study findings are as follows: (1) GECP significantly promotes income for herdsmen, with a marginal effect of 0.078. (2) The mechanism analysis indicates the GECP improves the income of herdsmen through the direct effect of increasing transfer income and the indirect effect of optimizing the allocation of labor, and promoting the livestock scale of barn feeding. (3) With respect to the income gap, this paper finds that areas with relatively high levels of development benefit more from GECP, which will widen the income gap between regions for herdsmen.

Keywords: ecological compensation; income growth; income gap; PES (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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