Social network effect on income structure of SLCP participants: Evidence from Baitoutan Village, China

摘要

Using a unique dataset covering all the households in Baitoutan village of Sichuan province, China, this paper attempts to open the "black box" related to the social network effect. It is to understand the Sloping Land Conversion Program (hereafter SLCP) participants' labor reallocation decisions and income structure through the identification of the types of social network effects peer or complementary. The results confirm the tendency of households to form social networks with their relatives and acquaintances within the village; these networks influence households' labor reallocation, which is revealed in their complementary income structure. This implies that there exists cooperation in terms of labor reallocation among households within a social network, as the share of agricultural income has a negative correlation with that of a household's acquaintances. In addition, a households' social position within the network is taken into account regarding their labor reallocation decision making. Models with network centrality (degree and eigenvector) are introduced for analysis. The results confirm that there is a cooperation in labor allocation within the network, resulting in a complementary type of social network effect in the village.