Purpose
The purpose of this paper is to explore the impact of using computers to obtain information on the farm household’s production and consumption based on a field survey of farm households in the northern China.
Design/methodology/approach
The most important methods applied are instrumental variable (IV) method and propensity score matching (PSM) method. Estimators of IV, PSM and nearest neighborhood matching approaches are considered together to check the robustness of empirical results.
Findings
This paper careful impact evaluation results suggest that the use of computer not only improves the size of arable land rented in but also reduces family labor input intensity and the probability of selling agricultural outputs at farm-gate markets. Moreover, it also stimulates transportation, garment, housing and insurance expenditures per capita.
Research limitations/implications
The database of this research comprises cross-section data, which does not support a cross-time comparison.
Practical implications
These results imply that it is vital to expand the coverage of computer use in rural areas. This may suggest that the importance of improving computer access is crucial for stimulating rural consumption increase. Furthermore, the need for the expansion of internet network coverage in western areas is also of importance.
Originality/value
First, the authors directly estimate computer usage impacts on a broader range of production and consumption indicators by including land-relative investments, variable investments, labor input and household’s expenditure and provide rigorous impact evaluations on the impact of access to computer. Second, the authors use IV and PSM methods to correct self-selection bias, going beyond the single equation approach in other studies. This enables us to identify the causal relationship between computer usage and farmer’s production and consumption decisions.
Abstract:Using a large dataset from the specialized apple production sites of China and multiple econometric methods, we identify the main determinants of farmers' land rental decisions and the effects from renting land in on their investment and economic welfare. It is found that having more effective cultivated land before renting in has a significantly negative effect on the land rented in, that households with rich land endowments or large areas of land rented in usually invest more in fixed assets, and that efficient provisions of credit and insurance are helpful to encourage investments in fixed assets. As a result, renting in land generates gains in terms of agricultural income, total income, and productive expenditure.
Using field surgveyed data from two apple production belts in China, this study estimates the impact of transaction costs on smallholders’ market participation and integration. The analysis is based on an innovative measurement of the transaction costs and a disaggregated analysis of sales, information, negotiation, and monitoring costs. The results reveal that farmers’ market participation levels are mainly determined by the proportional transaction costs and price, while their market integration depends on the fixed transaction costs and price. This suggests that, to lower the transaction costs and enable specialization and market participation, it is necessary to invest in and construct adequate farming infrastructure, update the rural information system, improve the structure of farmer households, and subsidize specialized rural cooperative organizations.
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