Impact of lockdown and government subsidies on rural households at early COVID-19 pandemic in China
China Agricultural Economic Review
ISSN: 1756-137X
Article publication date: 16 August 2022
Issue publication date: 23 January 2023
Abstract
Purpose
Given the scarcity of data during the early stages of the COVID-19 pandemic in China, the decision-making for non-pharmaceutical policies was mostly based on insufficient evidence. The purpose of this study is to assess the effectiveness of these policies, such as lockdown and government subsidies, on rural households and identify policy implications for China and other countries in dealing with pandemics.
Design/methodology/approach
The authors survey 2,408 rural households by telephone from 101 counties across 17 provinces in China during the first stage of the pandemic (March 2020). The authors use the ordered probit model and linear regression model to study the overall impact of policies and then use the quantile regression model and sub-sample regression method to study the heterogeneity of the effects of government policies.
Findings
The authors find that logistics disruption due to lockdown negatively affected rural households. Obstructed logistics is associated with a more significant loss for high-income households, while its impact on the loss expectation of low-income households is more severe. Breeding and other industries such as transport and sales suffer more from logistics than cultivation. The impact of logistics on intensive agricultural entities is more serious than that on professional farms. The government subsidy is more effective at reducing loss for low-income households. Lockdown and government subsidies have shown heterogeneous impacts on rural households.
Practical implications
The overall economic losses experienced by rural households in the early stages of the pandemic are controllable. The government policies of logistics and subsidies should target specific groups.
Originality/value
The authors evaluate the economic impacts of lockdown and government subsidies on rural households and show their heterogeneity among different groups. The authors further demonstrate the policy effectiveness in supporting rural households during the early stages of the pandemic and provide future policy guidance on major public health event.
Keywords
Acknowledgements
The authors acknowledge financial support from Fundamental Research Funds for the Central Universities (20720181060, 20720181004), National Natural Science Foundation of China (72003110, 71673315, 71850008), Qingchuang Science and Technology Support Plan of Universities in Shandong Province (2019RWE009), Social Sciences Project of Shandong Normal University (17SQR006), and the survey support from Bank of China Fullerton Village Bank. Such information has been updated in Funding Information Section.
Citation
Li, N., Chen, M., Gao, H., Huang, D. and Yang, X. (2023), "Impact of lockdown and government subsidies on rural households at early COVID-19 pandemic in China", China Agricultural Economic Review, Vol. 15 No. 1, pp. 109-133. https://doi.org/10.1108/CAER-12-2021-0239
Publisher
:Emerald Publishing Limited
Copyright © 2022, Emerald Publishing Limited