Estudios Comparativos, Identificación de buenas prácticas en otras

The overall Gini coefficient (G) for all rural households in the sample in Tiantangzhai Township is 0.4522, with the Gini coefficient for households participating in the CCFP (0.4615) slightly higher than that for non-participants (0.4379), indicating greater inequality among households in the CCFP (Fig. 4.3) although they have a higher mean income. This result of comparing Gini coefficients between households with and without CCFP is different from results in other study areas (J. Li et al., 2011), and may be attributed to the income structure pattern of households in the study area. In Tiantangzhai, the PES programs have existed for over ten years and local off-farm work and out-migration have become major activities for rural

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households. Similar to a previous study (Conghe Song et al., 2014), income from local off-farm jobs and remittances from out-migrants make up the lion’s share of total income for most households. Thus, off- farm income and remittances from out-migrants also tend to make the greatest contribution to total income inequality.

Figure 4.3 Lorenz Curves and Gini coefficients of total net income for households with and without CCFP.

Measures of inequality attributed to different income sources are provided in Table 4.3. For CCFP households, off-farm income and remittances from migrants make the greatest contributions to total income (33% and 30%, respectively) as shown by Sk, and also to income inequality as measured by sgk (42% and 38%, respectively). In addition, the pseudo-Gini coefficients (Ck) of local non-farm business profit, local

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off-farm earnings, and remittances from migrants for CCFP households are greater than G, indicating income from these activities worsens total income inequality. Receiving remittances is directly linked to sending out-migrants by households. Poor households without migrants cannot even support the initial costs of migration, while households with remittance-sending migrants can use money to invest in additional income-generating activities (see Chapter 3) or to improving existing activities. Thus, poor households who enrolled land parcels in the program may be more likely to be trapped in traditional agriculture and fail to shift labor to non-farm income-generating activities, such as to out-migration or local off-farm work, unless they already had out-migrants before CCFP enrollment. In general, it is evident from the results that households with income from not only crops and animals but also other sources such as PES, forest resources, and other sources lessens total income inequality, as their pseudo-Gini coefficients are lower than G.

For households without CCFP, the largest income shares are also from local off-farm income (33%) and remittances (31%), which makes substantial contribution to total income inequality (33% and 39%, respectively). In addition, local non-farm business income makes substantial contribution to total income inequality (12%). The Ck of local non-farm business income, remittances and other income for nonparticipants are greater than G, worsening total income inequality. In contrast to CCFP households, local off-farm income by nonparticipants has a slightly lower value of Ck than G and thus slightly decreases total income inequality. The payment from PES programs make the least contribution to the overall inequality for both types of households, which is due to the small proportion of the payment in total income. In addition, the Ck of PES payment for nonparticipant is negative, suggesting a negative correlation between PES payment and total income. For the households not participating CCFP, their PES payments are all from the EWFP, which varies widely among households in Tiantangzhai according to the forest lands they have. Households who receive more EWFP payment may be more satisfied with their living conditions higher in the mountains, and thus less likely to engage in new income-generating activities.

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Table 4.3 Measures of inequality attributed to different income sources for households with and without CCFP. Income Sk Rk Gk Ck SkRkGk sgk CCFP = 1 Crops 0.0770 0.2643 0.4949 0.1308 0.0101 2.2% Animals 0.0866 0.3536 0.7205 0.2548 0.0221 4.8% PES 0.0206 0.1183 0.4171 0.0493 0.0010 0.2% Forest resources 0.0736 0.4415 0.7919 0.3496 0.0257 5.6% Business 0.0528 0.5406 0.9452 0.5110 0.0270 5.8% Off-farm work 0.3271 0.7562 0.7777 0.5881 0.1924 41.7% Remittances 0.3030 0.7250 0.7997 0.5797 0.1757 38.1% Subsidies 0.0500 0.1762 0.5357 0.0944 0.0047 1.0% Other 0.0093 0.3178 0.9597 0.3050 0.0028 0.6% TOTAL 1.0000 1.0000 0.4615 0.4615 0.4615 100.0% CCFP = 0 Crops 0.0692 0.2448 0.4930 0.1207 0.0084 1.9% Animals 0.0683 0.3748 0.7625 0.2858 0.0195 4.5% PES 0.0100 -0.0942 0.5049 -0.0476 -0.0005 -0.1% Forest resources 0.0485 0.1743 0.7936 0.1383 0.0067 1.5% Business 0.0731 0.7818 0.9542 0.7460 0.0546 12.5% Off-farm work 0.3334 0.6216 0.6914 0.4298 0.1433 32.7% Remittances 0.3130 0.7118 0.7704 0.5484 0.1716 39.2% Subsidies 0.0507 0.1968 0.5852 0.1152 0.0058 1.3% Other 0.0336 0.8614 0.9821 0.8459 0.0285 6.5% TOTAL 1.0000 1.0000 0.4379 0.4379 0.4379 100.0%

Sk – share in total income

Rk – Gini correlation with total income rankings

Gk – Gini when consider all households, including those with zero income

Ck – pseudo-Gini coefficient, Ck = RkGk

SkRkGk – contribution to Gini coefficient of total income

sgk – percentage of contribution of source k income to Gini coefficient of total income

The income sources show different marginal effects on the total Gini coefficients for households with and without CCFP (Table 4.4). For both groups, some income sources have positive effects on the total Gini coefficient while others have negative effects on the total Gini coefficients. For CCFP households, increases in local off-farm work and remittances have the biggest effects on increasing the inequality in total income, while increases in income from agriculture (crops and animals) and subsidies most decrease total income inequality, followed by smaller effects of the PES payments and use of forest resources. For

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example, a one percent increase in off-farm income results in an increase in the total Gini by 9%, while a one percent increase in crop income decreases the total Gini by 5.5%.

Table 4.4 Marginal effects of income sources for households with and without CCFP

Income CCFP = 1 CCFP = 0 amf rmf amf rmf Crops -0.0255 -5.5% -0.0220 -5.0% Animals -0.0179 -3.9% -0.0104 -2.4% PES -0.0085 -1.8% -0.0049 -1.1% Forest resources -0.0082 -1.8% -0.0145 -3.3% Business 0.0026 0.6% 0.0225 5.1% Off-farm work 0.0414 9.0% -0.0027 -0.6% Remittances 0.0358 7.8% 0.0346 7.9% Subsidies -0.0183 -4.0% -0.0164 -3.7% Other -0.0015 -0.3% 0.0137 3.1%

amf – absolute change of the total Gini coefficient with 1% increase of source k income rmf – relative change of the total Gini coefficient with 1% increase of source k income

For households without CCFP, remittances followed by local non-farm business income have the largest marginal effects on increasing the total Gini, while other sources have negative marginal effects, led by agricultural incomes, subsidies and extraction of forest resources. Note that contrary to CCFP households, local off-farm work slightly reduces (improves) income inequality of non-CCFP households: a one percent increase in local off-farm income decreases the total Gini by 0.6%. The marginal effect of all PES payments on improving income equality for nonparticipants is -1.1%, which is slightly smaller than that for CCFP households (-1.8%).