[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-112949-en":3,"doc-seo-112949-105":29,"detail-sidebar-cat-0-en-105":91},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":20,"is_deleted":4,"is_public":20,"is_downloadable":20,"audit_status":20,"page_count":21,"language":22,"language_code":23,"site_id":24,"html_lang":23,"table_of_contents":25,"faqs":26,"seo_title":13,"seo_description":14,"update_tm":27,"read_time":28},112949,687197207919,"Theodora","https://ap-avatar.wpscdn.com/avatar/a000253d6f5f7c60be?x-image-process=image/resize,m_fixed,w_180,h_180&k=1779446848396160552",8,"Research & Report","The Impact of Positive Agricultural Income Shocks on Rural Chinese Households","The study analyzes how policy-driven increases in grain quota prices in post-collectivization rural China created quasi-random positive income shocks across households. Because rice-growing areas faced systematically larger quotas, climatic suitability for rice generates variation in shock size. Larger shocks reduce agricultural investment, raise non-agricultural business investment and migration, and increase credit access and non-staple consumption. Evidence points to credit constraints limiting diversification ex ante, then being relaxed by the shock.","Pub lic Disclosure Authorized Pub lic Disclosure Authorized  \nThe World Bank Economic Review, 34(1), 2020, 210–231 doi: 10.1093/wber/lhy008 Article  \nThe Impact of Positive Agricultural Income Shocks on Rural Chinese Households  \nJessica Leight  \nAbstract  \nIn the post-collectivization period, rural Chinese households were required to sell part of their grain output to the state at a below-market price; however, increases in this quota price beginning in 1993 generated substantial positive income shocks. These income shocks also varied cross-sectionally in accordance with crop composition given that quotas were systematically larger for rice-producing households, generating a quasi-random source of variation in the size of the shock driven by climatic variation in suitability for rice cultivation. Households induced to experience relatively larger income shocks show evidence of decreased agricultural investment, increased investment in non-agricultural businesses, and increased migration as households gain increased income, consistent with the hypothesis that credit constraints may have constrained some households from entering nonagricultural production ex ante. In addition, there is evidence that these households were concentrated among households who had not previously diversified out of agriculture.  \nJEL classification: O11  \nKeywords: rural china, income shocks, poverty trap  \nA large literature in development economics has sought to analyze the effects of both positive and negative income shocks on poor households, and in particular to probe whether such shocks lead to any systematic shifts in the allocation of productive activities. In China, rural households in the post-1983 period were required to sell a fixed quota of grain to the state at a below-market price as part of the socalled Household Responsibility System implemented following decollectivization. However, the central government began to raise this price gradually in the mid-1990s (Huang and Rozelle 2002) . This shift was equivalent to a reduction in the size of the lump-sum tax imposed on rural households (Huang 1998), or conversely, a positive income shock; moreover, given that grain quota prices remained high thereafter, the shock was plausibly viewed as an increase in both current and future expected income.  \nThis paper estimates the impact of this policy-driven shock on investment in agricultural and nonagricultural production, seeking to identify whether a lump-sum increase in income leads to a reallocation of productive activities. Crucially, the size of this shock varied systematically as a function of the crop cultivated, given the stark difference in the treatment of different crops under the quota system (Huang et al. 2002) . Predominantly rice-growing areas systematically experienced larger income shocks, given  \nJessica Leight (corresponding author) is a professor at American University, Washington, DC; her email address is[leight@american.edu. The author thanks Abhijit Banerjee](leight@american.edu. The author thanks Abhijit Banerjee), Loren Brandt, Esther Duflo, William Gentry, Doug Gollin, Rohini Pande, Albert Park, and Xiaobo Zhang for detailed feedback and seminar participants at the MIT political economy breakfast, and Williams, Cornell, IFPRI, Beijing University, the Chinese Center for Agricultural Policy, and the Hong Kong University of Science and Technology for comments. A supplementary online appendix is available with this article at The World Bank Economic Review website.  \n© The Author(s) 2018 . Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / THE WORLD BANK.  \nAll rights reserved. For permissions, please e-mail: [journals.permissions@oup.com](journals.permissions@oup.com)  \nDownloaded from [https://academic.oup.com/wber/article/34/1/210/5035667 by International Monetary Fund user on 23 June 2021](https://academic.oup.com/wber/article/34/1/210/5035667 by International M","cbCaiu1w5ja3MlgR","https://ap.wps.com/l/cbCaiu1w5ja3MlgR","pdf",903146,1,22,"English","en",105,"# Abstract\n## Background and Policy Mechanism\n## Identification Strategy and Variation in Shocks\n## Empirical Results and Economic Interpretation\n## Robustness and Specification Checks","[{\"question\":\"What policy change generated the positive income shocks studied in the paper?\",\"answer\":\"The central government raised the grain quota price gradually starting in the mid-1990s, creating positive income shocks for rural households subject to quota sales at below-market prices.\"},{\"question\":\"How does crop choice affect the size of the income shock?\",\"answer\":\"The quota system treated crops differently; rice-growing areas faced larger mandatory quota quantities, so climatic suitability for rice created systematic variation in shock size across households.\"},{\"question\":\"What behavioral changes do households show after experiencing larger income shocks?\",\"answer\":\"Households with larger shocks decrease agricultural investment, increase investment in non-agricultural businesses, and increase migration, with higher probability of accessing credit and greater consumption of non-staple goods.\"}]",1784498478,55,{"code":4,"msg":30,"data":31},"ok",{"site_id":24,"language":23,"slug":32,"title":13,"keywords":33,"description":14,"schema_data":34,"social_meta":86,"head_meta":88,"extra_data":90,"updated_unix":27},"the-impact-of-positive-agricultural-income-shocks-on-rural-chinese-households","",{"@graph":35,"@context":85},[36,53,68],{"@type":37,"itemListElement":38},"BreadcrumbList",[39,43,47,50],{"item":40,"name":41,"@type":42,"position":20},"https://docshare.wps.com","Home","ListItem",{"item":44,"name":45,"@type":42,"position":46},"https://docshare.wps.com/document/","Document",2,{"item":48,"name":12,"@type":42,"position":49},"https://docshare.wps.com/document/research-report/",3,{"item":51,"name":13,"@type":42,"position":52},"https://docshare.wps.com/document/the-impact-of-positive-agricultural-income-shocks-on-rural-chinese-households/112949/",4,{"url":51,"name":13,"@type":54,"author":55,"headline":13,"publisher":57,"fileFormat":60,"inLanguage":23,"description":14,"dateModified":61,"datePublished":62,"encodingFormat":60,"isAccessibleForFree":63,"interactionStatistic":64},"DigitalDocument",{"name":9,"@type":56},"Person",{"url":40,"name":58,"@type":59},"DocShare","Organization","application/pdf","2026-07-20","2026-07-19",true,{"@type":65,"interactionType":66,"userInteractionCount":20},"InteractionCounter",{"@type":67},"ViewAction",{"@type":69,"mainEntity":70},"FAQPage",[71,77,81],{"name":72,"@type":73,"acceptedAnswer":74},"What policy change generated the positive income shocks studied in the paper?","Question",{"text":75,"@type":76},"The central government raised the grain quota price gradually starting in the mid-1990s, creating positive income shocks for rural households subject to quota sales at below-market prices.","Answer",{"name":78,"@type":73,"acceptedAnswer":79},"How does crop choice affect the size of the income shock?",{"text":80,"@type":76},"The quota system treated crops differently; rice-growing areas faced larger mandatory quota quantities, so climatic suitability for rice created systematic variation in shock size across households.",{"name":82,"@type":73,"acceptedAnswer":83},"What behavioral changes do households show after experiencing larger income shocks?",{"text":84,"@type":76},"Households with larger shocks decrease agricultural investment, increase investment in non-agricultural businesses, and increase migration, with higher probability of accessing credit and greater consumption of non-staple goods.","https://schema.org",{"og:url":51,"og:type":87,"og:title":13,"og:site_name":58,"og:description":14},"article",{"robots":89,"canonical":51},"index,follow",{"doc_id":7,"site_id":24},{"code":4,"msg":5,"data":92},[93,97,101,105,110,115,120,123,128,131,135],{"id":20,"doc_module":4,"doc_module_name":45,"category_name":94,"show_sort_weight":95,"slug":96},"Story & Novel",90,"story-novel",{"id":46,"doc_module":4,"doc_module_name":45,"category_name":98,"show_sort_weight":99,"slug":100},"Literature",80,"literature",{"id":52,"doc_module":4,"doc_module_name":45,"category_name":102,"show_sort_weight":103,"slug":104},"Exam",70,"exam",{"id":106,"doc_module":4,"doc_module_name":45,"category_name":107,"show_sort_weight":108,"slug":109},5,"Comic",60,"comic",{"id":111,"doc_module":4,"doc_module_name":45,"category_name":112,"show_sort_weight":113,"slug":114},6,"Technology",50,"technology",{"id":116,"doc_module":4,"doc_module_name":45,"category_name":117,"show_sort_weight":118,"slug":119},7,"Healthcare",40,"healthcare",{"id":11,"doc_module":4,"doc_module_name":45,"category_name":12,"show_sort_weight":121,"slug":122},30,"research-report",{"id":124,"doc_module":4,"doc_module_name":45,"category_name":125,"show_sort_weight":126,"slug":127},9,"Religion & Spirituality",20,"religion-spirituality",{"id":126,"doc_module":4,"doc_module_name":45,"category_name":129,"show_sort_weight":126,"slug":130},"World Cup","world-cup",{"id":132,"doc_module":4,"doc_module_name":45,"category_name":133,"show_sort_weight":132,"slug":134},10,"Lifestyle","lifestyle",{"id":136,"doc_module":4,"doc_module_name":45,"category_name":137,"show_sort_weight":106,"slug":138},19,"General","general"]