Social Interactions and Spillover Effects in Chinese Family Farming

Summary

This paper aims to test the effects of social interaction and input spillovers on the agriculturalperformance of family farms in mixed paddy rice production (organic and conventional farming). Using surveypanel data from a Chinese village, we adopt a Spatial Durbin Model (SDM) derived from spatial econometrics todisentangle the social interaction effect from spillover effects and to control for technological heterogeneities. Ouranalysis reveals a negative social interaction effect indicating that an increase in the yield of neighbouring plotsleads to a decrease in the yield of the plot itself. We also find input spillovers. Labour, capital costs, water andorganic pesticides have positive spillovers while external nutrients (nitrogen and phosphate) have negativespillover effects. Our study thus calls for a better understanding of social interactions and spillover effectsamong farmers in the promotion of sustainable family farming.