Water conservancy and farmers' income: A quasi-natural experiment based on the Three Gorges project

Summary

This quasi-natural experiment exploits temporal and spatial variation in exposure to the Three Gorges Project's flood control benefits to estimate causal effects on rural livelihoods in the Yangtze River basin. The authors find that flood control infrastructure increased rural per capita disposable income through three mechanisms: higher agricultural productivity, greater household entrepreneurship and nonfarm business activity, and increased local investment. The income gains were larger in regions with higher flood risk and in Central China, and the project contributed to narrowing the urban–rural income gap, suggesting water infrastructure can support more inclusive rural development.

Regional applicability

This study examines large-scale water infrastructure policy in China and is not directly applicable to the United Kingdom context, where agricultural policy drivers and flood risk profiles differ substantially. However, the methodological approach (difference-in-differences using natural variation in infrastructure exposure) and the finding that flood protection can support rural livelihoods through multiple economic channels may inform UK policy discussions on infrastructure investment for climate resilience and rural development, particularly in flood-prone regions.

Key measures

Rural per capita disposable income; agricultural productivity; household entrepreneurship and nonfarm business activity; local investment; urban–rural income gap

Outcomes reported

The study measured the effect of the Three Gorges Project's flood control function on rural residents' per capita disposable income across 351 counties from 2003 to 2020. It examined mechanisms including agricultural productivity, household entrepreneurship, nonfarm business activity, and local investment, as well as effects on the urban–rural income gap.

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