Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/53108
Authors: 
Ravallion, Martin
Year of Publication: 
2003
Series/Report no.: 
WIDER Discussion Papers // World Institute for Development Economics (UNU-WIDER) 2003/54
Abstract: 
The paper tests for external effects of local economic activity on consumption and income growth at the farm household level using panel data from four provinces of post-reform rural China. The tests allow for nonstationary fixed effects in the consumption growth process. Evidence is found of geographic externalities, stemming from spillover effects of the level and composition of local economic activity and private returns to local human and physical infrastructure endowments. The results suggest an explanation for rural underdevelopment arising from underinvestment in certain externality-generating activities, of which agricultural development emerges as the most important.
Subjects: 
consumption growth
income growth
externalities
panel data
rural China
JEL: 
D91
R11
Q12
Document Type: 
Working Paper

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