The effects of off-farm work on fertilizer and pesticide expenditures in China

This study examines the effects of participation in off-farm work on farm expenditures on fertilizer and pesticide, using farm household survey data from China. Simple mean value comparisons reveal no statistically significant differences in fertilizer and pesticide expenditures between off-farm work participants and nonparticipants. However, econometric estimation with a treatment effects model shows a negative selection bias. After controlling for this bias, the empirical results show that participation in off-farm work exerts a positive and statistically significant impact on fertilizer and pesticide expenditures. Our findings generally suggest that the income effect of off-farm work stimulates agricultural production by increasing investments in productivity-enhancing inputs.