Table 3: Two-stage least squares results

||(1)|(2)|(3)|(4)|(5)|(6)|(7)|
|---|---|---|---|---|---|---|---|
||**Panel A: A**|**gricultural and **|**non-agricultu**|**ral investme**|**nt and incom**|**e**||
||Agri. input|Agri inc.|Non-agri. inv.|Non-agri. inc.|Tot. inc.|Outside labo|r Migration|
|Quota income<br>(lagged)|-.205<br>(.074)<sup>_∗∗∗_</sup>|-.123<br>(.071)<sup>_∗_</sup>|.197<br>(.112)<sup>_∗_</sup>|.066<br>(.058)|-.062<br>(.043)|.053<br>(.057)|.175<br>(.089)<sup>_∗∗_</sup>|
|Hansen J-statistic|.239|.056|.017|.935|.083|.007|.087|
|Obs.|16203|16203|16203|16203|16203|16203|16203|
|||**Panel B: C**|**redit and con**|**sumption**||||
||Credit dummy|Amount borrowed|Grain cons.|Other cons.|Total cons.|||
|Quota income<br>(lagged)|.099<br>(.049)<sup>_∗∗_</sup>|.317<br>(.188)<sup>_∗_</sup>|-.067<br>(.084)|.136<br>(.050)<sup>_∗∗∗_</sup>|.119<br>(.044)<sup>_∗∗∗_</sup>|||
|Hansen J-statistic|.175|.002|.979|.263|.204|||
|Obs.|16203|16203|16201|16177|16201|||
|||**Panel C: **|**Agriculture in**|**vestment**||||
||Sown area|Labor|Fertilizer value|Seeds value|Animal inv.|Tools inv.||
|Quota income<br>(lagged)|-.114<br>(.170)|-9.714<br>(2.034)<sup>_∗∗∗_</sup>|-27.029<br>(52.041)|-25.946<br>(6.866)<sup>_∗∗∗_</sup>|25.717<br>(96.532)|-16.160<br>(14.318)||
|Mean dep. var.|1.59|188.42|570.88|87.630|-41.43|7.39||
|Hansen J statistic|.247|.322|.609|1.319|3.125|.801||
|Obs.|16202|16177|16076|16203|15511|15941||
|||**Panel D: No**|**n-agricultural**|**investment**||||
||Non-agri. labor|Labor dummy|Inv.|Inv. dummy|Days worked<br>outside hh|||
|Quota income<br>(lagged)|17.067<br>(12.612)|.080<br>(.045)<sup>_∗_</sup>|2.412<br>(2.479)|.098<br>(.044)<sup>_∗∗_</sup>|-9.032<br>(12.514)|||
|Mean dep. var.|75.79|.41|2.98|.06|133.60|||
|Hansen J-statistic|.001|.755|.374|.448|1.034|||
|Obs.|16203|16203|16201|16177|16104|||

Notes: All specifications include village and province-year fixed effects, the interaction of the climatic index and a summary measure of market prices, climatic index quantile fixed effects interacted with the two year lagged market price, climatic quantile index fixed effects interacted with year fixed effects, and industrial quantile fixed effects interacted with year fixed effects. Standard errors are estimated employing two-way clustering at the province and year level. The independent variable is quota income, lagged, instrumented by the lagged interactions of two climatic indices of the propensity to cultivate rice (derived from weather data and FAO data), interacted with the quota price. Asterisks indicate significance at the ten, five, and one percent level, respectively.

In Panel A, the dependent variable in Column (1) is a summary variable of agricultural investment, calculating using principal component analysis on six variables (area sown, agricultural labor, value of fertilizer employed, value of seeds employed, investment in animals, and investment in tools). The dependent variable in Column (2) is agricultural income. The dependent variable in Column (3) is a summary variable of non-agricultural investment, calculated using principal component analysis on four variables (a dummy variable for any new cash investment in non-agricultural machinery, a dummy variable for any labor invested in a non-agricultural business, and the amount of labor and cash investment reported in non-agricultural businesses). The dependent variable in Column (4) is income from non-agricultural household businesses and wage labor, and the dependent variable in Column (5) is total income. The dependent variable in Column (6) is a dummy variable for any outside labor; the dependent variable in Column (7) is a dummy variable for any labor worked as a migrant. In Panel B, the dependent variable in Column (1) is a dummy variable if the household reports any access to credit, and the dependent variable in Column (2) is the amount of credit. The dependent variables in Columns (3) through (5) are consumption in yuan on non-staple and staple items, and total consumption. All non-dummy dependent variables are standardized to have mean zero and standard deviation one.

The dependent variables in Panel C include sown area in hectares; days reported worked in agriculture; value of fertilizer and seeds reported used, in yuan; and new investment in tools and animals, reported in yuan. Expenditure reported in yuan is deflated using deflators for agricultural inputs provided by the National Bureau of Statistics. The dependent variables in Panel D include days worked in non-agricultural businesses; a dummy variable for working in a non-agricultural business; cash investment in a non-agricultural business; a dummy for positive cash investment; and days worked outside the household. Cash investment is deflated using indices for factory output compiled by the NBS.

Source: Data from the RCRE household panel analyzed by the author.