Ravallion, Martin2014-08-072014-08-072002-08https://hdl.handle.net/10986/19268The author 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 non-stationary 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 under-investment in certain externality-generating activities, of which agricultural development emerges as the most important.en-USCC BY 3.0 IGORURAL DEVELOPMENTRURAL ECONOMIC DEVELOPMENTCONSUMPTION GROWTHINCOME GROWTHFARM INCOMEHOUSEHOLD WELFARE INDICATORSGEOGRAPHIC VARIABLESHUMAN CAPITALPHYSICAL INFRASTRUCTUREAGRICULTURAL DEVELOPMENT ADVERSE SELECTIONAGRICULTURAL GROWTHAGRICULTURAL PRODUCTIVITYAGRICULTUREBASIC EDUCATIONCAPITAL MARKETCLIMATIC CONDITIONSCONSUMPTION GROWTHCROWDINGDATA MODELDATA SETDEFLATORSDESCRIPTIVE STATISTICSDEVELOPING COUNTRIESDEVELOPING WORLDDEVELOPMENT ECONOMICSDEVELOPMENT POLICYDEVELOPMENT RESEARCHDIVERSIFICATIONECONOMETRIC MODELECONOMETRICSECONOMIC ACTIVITIESECONOMIC ACTIVITYECONOMIC DEVELOPMENTECONOMIC EFFICIENCYECONOMIC GROWTHECONOMIC PROGRESSECONOMIC REFORMSECONOMIC REVIEWECONOMIC STATISTICSECONOMIC STUDIESECONOMIC THEORYECONOMIC TRANSFORMATIONEMPIRICAL LITERATUREEMPIRICAL RESULTSEMPIRICAL WORKEMPLOYMENTERROR TERMEXPENDITURESEXPLANATORY VARIABLESEXTERNALITIESEXTERNALITYFISHINGFIXED EFFECTSFOOD POLICY RESEARCHFORESTRYGEOGRAPHIC POVERTY TRAPSGROWTH MODELGROWTH PROCESSGROWTH PROSPECTSGROWTH RATEGROWTH RATESGROWTH REGRESSIONGROWTH REGRESSIONSHEALTH CAREHEALTH INDICATORSHORIZONTAL EQUITYHOUSEHOLD INCOMEHUMAN CAPITALIMPERFECT CREDITIMPERFECT INFORMATIONINCOMEINCOME DATAINCOME EFFECTINCOME GROWTHINCOME GROWTH RATEINCOME SOURCEINCOME SOURCESINCOMESINCOMPLETE MARKETSINCREASING RETURNSINDUSTRIAL DEVELOPMENTINDUSTRIALIZATIONINEFFICIENCYINEQUALITYINFANT MORTALITYINSURANCELABOR MARKETSLAGGED VALUESLIVING STANDARDSLONG-RUN GROWTHMARGINAL PRODUCTMARGINAL PRODUCTSMARKET IMPERFECTIONSMEAN INCOMEMEAN INCOMESMEASUREMENT ERRORSMICRO DATAMICRO MODELNEGATIVE EXTERNALITIESNETWORK EXTERNALITIES0 HYPOTHESISPOLICY CIRCLESPOLICY POINT OF VIEWPOLITICAL ECONOMYPOOR AREASPOOR COUNTRIESPOSITIVE EFFECTPOSITIVE EFFECTSPOSITIVE EXTERNALITIESPOVERTY LINEPOVERTY LINESPOVERTY REDUCTIONPRIVATE AGENTSPRODUCTIVE ASSETSPRODUCTIVITYPROPERTY RIGHTSPUBLIC ECONOMICSPUBLIC GOODSPUBLIC POLICYRAPID GROWTHRURAL INFRASTRUCTURESAVINGSSERIAL CORRELATIONSERIAL INDEPENDENCESPILLOVERSSTANDARD DEVIATIONSTREAMSTHEORETICAL MODELSWEALTH10.1596/1813-9450-2879