How Farm Machinery Rental Services and Off-Farm Work Affect Household Income in China

Weiwei Wang, Zhihai Yang, Xiangqun Gu, Amin Mugera and Ning Yin ()
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Weiwei Wang: Institute of Rural Economics, Hubei Academy of Social Sciences, Wuhan 430060, China
Zhihai Yang: College of Economics and Management, Huazhong Agricultural University, Wuhan 430070, China
Xiangqun Gu: College of Economics and Management, Huazhong Agricultural University, Wuhan 430070, China
Amin Mugera: The UWA Institute of Agriculture, The University of Western Australia, Perth 6000, Australia
Ning Yin: College of Economics, Hunan Agricultural University, Changsha 410128, China

Agriculture, 2024, vol. 14, issue 10, 1-16

Abstract: (1) Background: Most nations struggle to close significant income gaps between high and low earners. While the adoption of farm machinery rental services and off-farm employment may be beneficial, it is unclear whether jointly applying both approaches can raise income levels in rural households or help narrow the income gap within the farm sector. This study investigated scenarios involving both participation in farm machinery rental markets and in off-farm work, analyzing their varied impacts on household incomes based on survey data from 1027 rice producers in rural China. (2) Methods: We employed a two-stage econometric procedure encompassing a bivariate ordered probit model with an endogeneity-corrected unconditional quantile regression model. (3) Results: Rice farmers often simultaneously rent farm machinery services and engage in off-farm work. Both activities positively affect their household incomes; however, these effects vary across different income levels. Renting farm machinery provides greater marginal benefits for lower-income households, while off-farm employment has a stronger impact on higher-income households. Farm machinery rental services appear to benefit disadvantaged households more than off-farm employment opportunities do. (4) Suggestions: To enhance the welfare of lower-income households, policymakers should focus on expanding access to farm machinery rental services.

Keywords: farm machinery rental services; off-farm work; household income; UQR model; 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
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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