Technological change and agricultural household income distribution: Theory and evidence from China

This article applies a general equilibrium model to analyse the impact of n ew rice technology on household income and uses agricultural household surv ey data from China to test the implications of this model. It is shown that , when a new rice technology becomes available, the adopting household will reallocate resources to increase rice production and reduce the production of other goods. Meanwhile, the non-adopting households will do the opposit e. Thus, the income from rice becomes increasingly concentrated in the adop ting households and income from non-rice becomes increasingly concentrated in the non-adopting households. If only one source of income is examined, t he introduction of new rice technology increases the inequality of income d istribution in rural areas. But, if the total household income is examined, the distributional inequality is mitigated.