Increase or Reduce: How Does Rural Infrastructure Investment Affect Villagers’ Income?

Shichao Yuan and Xizhuo Wang ()
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Shichao Yuan: Academy of Agricultural Planning and Engineering, Ministry of Agriculture and Rural Affairs, Beijing 100125, China
Xizhuo Wang: Academy of Agricultural Planning and Engineering, Ministry of Agriculture and Rural Affairs, Beijing 100125, China

Agriculture, 2024, vol. 14, issue 12, 1-21

Abstract: Rural infrastructure is an important foundation for achieving sustainable rural development. To effectively formulate policies for rural infrastructure, it is crucial to evaluate the benefits of rural infrastructure investment (RII) using a systematic method. This study aims to conduct a systematic analysis of the income-increasing effect of RII from a multidimensional perspective, and provide a reference for developing countries to adjust and improve rural infrastructure policies. For this purpose, this study has utilized 15 years of data in China to analyze the income-increasing effect of RII from three dimensions: structure, spatiality, and heterogeneity. The results indicate that (1) in terms of structure, both living infrastructure investment (LII) and production infrastructure investment (PII) promote wage income. PII has an increasing effect on non-wage income, but the increasing effect of LII on non-wage income is not evident. Meanwhile, the income-increasing effect of RII for high-income groups is larger than that for low-income groups. (2) In terms of spatiality, RII has a spatial spillover effect, which increases villagers’ income in neighboring areas. From the perspective of spatial effect decomposition, the indirect effect of RII even exceeds the direct effect. (3) In terms of heterogeneity, the increase in the level of job-related migration inhibits the income-increasing effect of LII but promotes the income-increasing effect of PII; the improvement of the education level promotes the income-increasing effect of LII but inhibits the income-increasing effect of PII.

Keywords: rural infrastructure; income; structure; spatiality; heterogeneity; China (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: 2024
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