Road to Specialization in Agricultural Production: Tales of 18 Natural Villages in China
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We use a panel survey at the household level primarily conducted in 18 natural villages over three waves in Guizhou province, China, to study how improved road access shapes farmers’ cropping and input use. Our results show that access to roads significantly improves the level of specialization in household agricultural production as measured by the Herfindahl-Hirschman Index. In villages with better road access, farmers plant fewer crops and invest more intermediate input. Through specialization and increased use of intermediate input, road connections improve farmers’ agricultural income and total income per capita. In addition, the cash income of agricultural product also increases, providing evidence of more trading of produced goods due to better connectivity. However, better access to rural roads does not seem to bring about significant changes in non-agricultural income.