Study On Source Of China's Agricultural Production Difference

China's agriculture has experienced rapid growth after a series of reforms since 1978.Agricultural households' living conditions have been improved greatly as a result.However,while households income from agricultural activities is increasing,the income gap among households are also enlarging.The widening disparity may impose negative effects on China's social stability and economic development.Accordingly,the Chinese government releases a series of policies focusing on Three Rural Issues(rural areas,farmers,and agriculture).To improve farmers' life and diminish the agricultural income gap,the Central Committee of the Communist Party of China and the State Department have successively released suggestions for agricultural modernization and agricultural technological development for seven years since 2012 to 2018.Investigation of agricultural households' production difference is crucial to reduce their income disparity.Therefore,this thesis intends to study the possible factors leading to agricultural households' technology difference,and discuss whether the agricultural modernization since 2012 offsets the negative effects resulted from those factors.To explore the possible reasons for agricultural production difference,this thesis constructs a Household Decision Model to investigate the issue from the perspectives on a household's physical capital-related technology adoption decision and its human capital investment decision.Besides a household's inborn factor endowments and natural endowments,the model suggests that the key to technology difference is relative prices of factors and output.The relative prices represent a household's relative cost and revenue of investing in technology and human capital.Whether a household chooses to adopt more advanced technology and invests more in human capital depend on whether revenues of these activities compensate for their costs.Since each household faces different price conditions,their decisions for technology improvement are different,causing divergent technological improvement levels.To testify the model's conclusion and gauge whether the agricultural modernization since 2012 compensates the negative effects resulted from relative prices,data from China Family Panel Studies(CFPS)in waves 2012,2014,2016 and 2018 is employed.The empirical analysis takes two steps.First,a varying coefficient stochastic frontier analysis is applied to estimate households' factor elasticities and total factor productivity.Then a random effects model is used.The empirical result shows that as relative prices' proxy variable,a household's distance to its nearest business center suppresses the household's human capital and physical capital upgrading,proving the model's main conclusion;government transfer slightly improves the household's human capital and physical capital.Meanwhile,it is also found that the agricultural modernization process since 2012 mitigates the negative effects of relative prices on agricultural technology improvement.