New Opportunities for Economic Analysis with Rural Household Data in China Bryan Lohmar Linxiu Zhang and Fred Gale

Motivation Dramatic changes in China over the last 25 years after production autonomy was extended to farm households Understanding how farm households respond to policies in the new environment requires data that encompasses all aspects of household economic activity

This Presentation Outlines: The establishment of household surveys in China The changes in household economic activity as households are increasingly extended economic autonomy How research results from household data can help policymakers understand important aspects of the rural economy

Traditional Sources of Data Starting in 1949, local agricultural stations collected data on agricultural production and reported these to higher level offices, ultimately aggregated by the Ministry of Agriculture and passed on to the State Statistical Bureau –Limited household survey information –Emphasis on grain production and input use –Opportunities for bias

Post-reform Household Survey Data Since reforms began in 1979, many state agencies and independent research institutes have conducted household surveys: –National Bureau of Statistics Annual survey after 1977, about 68,000 households (world’s largest), sample rotates on a 3-year cycle –Ministry of Agriculture Annual survey after 1986, about 21,000 households, panel data –Others Multiple smaller scale surveys carried out by Chinese academies and universities as well as government agencies

Changes in China’s Rural Economy, Reforms in 1979 restored household production autonomy Household survey data allows social scientists to analyze important trends in China’s economy such as: –Off-farm labor movement –Increasing horticultural and livestock production –Decreasing grain consumption

Percent of Rural Labor Working Off-Farm is Increasing Source: 2000 Land and Labor Survey, Chinese Academy of Sciences

Off-farm Employment Type and Income

Non-Grain Agricultural Production and Grain Production Chart. Annual growth rates in production of livestock, fruit and grain Percent Source: China Statistical Yearbook, National Bureau of Statistics

Rural Grain Consumption Falling and Sales Increasing Chart. Per Capita Grain Use on Farms: Source: National Bureau of Statistics, Rural Household Survey

Share of Rural Household Income from Farm Activities is Declining Source: National Bureau of Statistics, Rural Household Survey

Changes in Rural Income Profile: Overview The share of rural income coming from non-farm and non-grain activities has increased enormously: –Since the 1990s, more than 90% of rural household income increase have come from non-farm activities –Farm income itself is increasingly due to livestock and horticultural crops rather then grain

Implications for Policy Grain price policy is less important for rural incomes –Research investments may be best way to maintain high grain production Investments in education and infrastructure (both physical and institutional) help increase rural incomes more than grain policy

Some Problems with Household Data in China Accuracy –Mostly a problem with reported data –Some sampling issues Availability and duplication –Duplication raises costs –Availability issues reduce benefits Economic data –Prices and wages are not always reported in household surveys

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