Risk, under-investment in agricultural assets and dynamic asset poverty in rural China
Jing You ()
China Economic Review, 2014, vol. 29, issue C, 27-45
This paper seeks new insight into the reasons for persistent hardship in some Chinese rural households from the perspective of assets, stressing the long-run implications of shocks and risk on households' agricultural asset holdings. Households show a tendency to hold onto substantial savings to cope with possible negative shocks, and are predisposed to specialize in low-risk low-return agriculture under ex ante credit constraints and the fear of low welfare outcomes if production plans should be unsuccessful. Overall, households' responses to uninsured shocks and risk cause inefficiencies and deficiencies of investment in agricultural asset accumulation. Multiple equilibria in the dynamics of household agricultural assets as well as under-investment as a response to risk make some households less able to earn income above the poverty line and keep them trapped in long-term low-equilibrium asset poverty.
Keywords: Risk; Asset dynamics; Poverty trap; Rural China (search for similar items in EconPapers)
JEL-codes: I32 O12 O53 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:29:y:2014:i:c:p:27-45
Access Statistics for this article
China Economic Review is currently edited by B.M. Fleisher, K. X. D. Huang, M.E. Lovely, Y. Wen, X. Zhang and X. Zhu
More articles in China Economic Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().