Edited by Jeff Bennett, Xuehong Wang and Lei Zhang
Chapter 5: Economic Efficiency Impacts
5. Economic efﬁciency impacts Jeff Bennett, Guangcui Dai, Jincheng Zhao, Li Jiang, Zhitao Zhang, Dan Liang and Xuehong Wang INTRODUCTION In the previous chapter, the ﬁnancial impacts of the introduction of the Conversion of Cropland to Forest and Grassland Program (CCFGP) on farmer livelihoods were analysed through the examination of survey data collected from 400 farm households across four counties in two of China’s Northwest Provinces, Qinghai and Shaanxi. The aim of this chapter is to convert that analysis to one that investigates the economic beneﬁts and costs associated with the changes in agricultural production induced by the implementation of the Program. Whilst the goal of Chapter 4 was to gain an understanding of the incentives for farmers to continue their involvement in the Program, the focus here shifts to a consideration of the economic efﬁciency of the Chinese investment in the Program. Hence, the ﬁrst key element of the research reported in this chapter is the conversion of on-farm ﬁnancial impacts to the effects of the Program on wider social welfare. The principles of cost–beneﬁt analysis are therefore invoked. The second key element is the extrapolation of the estimates of beneﬁts and costs derived from the survey data to the population of farm households in the study region. This chapter is made up of four further parts. In Section 2, the methodology used for converting the ﬁnancial impacts estimated for the sample of farm households to economic beneﬁts and costs is detailed....
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