Detecting Endogeneity Bias in Households’ Decisions to Participate in China’s Sloping Land Conversion Program and Reallocate Their Labour Times
Runsheng Yin, Hao Liu et all
College of Economics and Management, Zhejiang A&F University, Department of Forestry, Michigan State University USA
The goal of this paper is to test possible endogeneity bias as reflected in the likelihood and extent of both participation in China’s largest ecological restoration program and related labor transfer.
Using appropriate testing procedures and a panel dataset of more than 1,000 households over 11 years, we reject the hypothesis that there is a significant self-selection bias in households’ decision to participate in the program and generate farming income, but such a bias was found in
household behavior of generating off-farm income, making the impact of off-farm labor time onincome enhanced while the effect of program participation no longer significant. Thus, it becomes essential to remove the endogeneity bias in identifying the determinants of off-farm
income.
Event: Land Governance in an Interconnected World_Annual World Bank Conference on Land and Poverty_2018
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