Households' Decisions to Participate in China's Sloping Land Conversion Program and Reallocate Their Labour Times: Is There Endogeneity Bias?

Runsheng Yin, Hao Liu, Can Liu and Gang Lu

Ecological Economics, 2018, vol. 145, issue C, 380-390

Abstract: Past impact evaluations of China's largest ecological restoration program have assumed the absence of self-selection (endogeneity) in the likelihood and extent of participation. Using appropriate testing procedures and a panel dataset of >1000 households over 11years in two primary provinces, we found evidence of self-selection in household behavior of generating off-farm income. But the hypothesis was rejected that there was a significant self-selection component in households' decision to participate in the program and generate farming income. Evaluations ignoring the self-section for off-farm labor were found to be biased and overly positive on program income impact. Self-selection should thus be explicitly included, unless there is counter evidence, in any study of this kind.

Keywords: Payments for ecosystem services; Ecological restoration; Labour reallocation; Endogenous selection; Instrumental variable method; Panel data; Fixed effects (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:145:y:2018:i:c:p:380-390

DOI: 10.1016/j.ecolecon.2017.11.020

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