The Impact of Establishment of Nature Reserves on the Urban–Rural Income Gap: Evidence from County-Level Analysis in China

Abstract

While China has seen an economic boom in recent decades, ecological issues are becoming increasingly challenging, with biodiversity seriously threatened. Establishing nature reserves (NRs) is deemed a feasible measure to ease ecological pressure, but few studies have evaluated the impact of the establishment of NRs on the urban–rural income gap. Therefore, based on the county-level panel data from 2010 to 2018, this study analyzed in depth the effects of the establishment of NRs on the urban–rural income gap in China. The results suggested that establishing NRs is beneficial to bridging the income gap between urban and rural areas, especially in the western and the northeastern regions. In contrast to other levels (provincial level, city level, and county level), the establishment of national-level NRs demonstrated a more prominent effect on narrowing the urban–rural income gap. It is thus proposed to improve corresponding laws to strengthen the protection of NRs, especially for those located in the western and northeastern regions, where the increase in eco-economic compensation and development of tourism brands for the ecological tourism industry are of necessity. Taken together, this study provides evidence that the establishment of NRs alleviates the urban–rural income gap in China.

1. Introduction

Nature reserves (NRs) are the geographical spaces that are dedicated to conserving nature in terms of ecosystem service and cultural values, which is deemed as one of the most important strategies for species conservation and slowing down the rapid loss of biodiversity [1]. The percentage of protected land on the planet continues to rise as governments work to meet the globally agreed-upon target of 17% (as outlined in Aichi Target 11 of the Convention on Biological Diversity) [2]. However, the establishment of NRs has been condemned for affecting the livelihoods of local people, particularly those in developing countries, since NRs contribute to biodiversity protection by preventing the conversion of these species-rich lands to other uses (e.g., industrial, residential, or agricultural) [3]. In particular, the majority of biodiversity hotspots are found in rural areas, where local impacts of conservation efforts may occur [4]. The establishment of NRs restricts local rural residents from accessing these natural resources, resulting in local communities’ poverty worsening and raising the risk of widening the income gap between urban and rural areas [5].

In China, with the implementation of the industrial priority development policy and the gradual acceleration of urbanization, the income gap between urban and rural residents has been increasing [6]. Additionally, NRs are generally established in “old, young, and poor” areas, such as ethnic minorities and mountainous areas [7,8]. The backward economic development in these regions, coupled with the single production structure of their residents, results in livelihoods reliant on natural resources for livelihood. As the conservation strategies prioritize biological preservation over the economic effects on local citizens, the income decline in the community near NRs may further enlarge the urban–rural income gap [3]. To alleviate this situation, the state implements ecological compensation policies for NRs, where activities such as ecotourism can be carried out in the experimental areas of the reserves, which may boost the income growth of local residents, lowering the income disparity [9]. Nevertheless, the overall impact of NRs on the urban–rural income gap in China, especially the geographical distribution and hierarchical heterogeneity at the county level, remains elusive. To protect the environment and achieve balanced economic development, it is imperative to strengthen source and environmental protection and reduce the income gap between urban and rural populations. Therefore, a thorough investigation into how NR establishment affects such income disparity is warranted [3].

In this study, the current situation of NRs and the income of urban and rural residents in China is analyzed, followed by the development of a fixed-effects model to explore how the urban–rural income gap corresponds to changes after the establishment of protected areas. The objectives are as follows: (1) to investigate the characteristics and trend of NRs and the income gap in China; (2) to construct an econometric model and empirically analyze the impact of NRs on the urban–rural income gap at the county level.

2. Literature Reviews

At present, studies on NRs mainly concentrate on investigating the factors affecting the distribution of NRs and analyzing the conservation costs and benefits of NRs [10]. In the case of the influencing factor analysis, GIS software (Arcgis 10.5) is generally used as a tool to build a spatial distribution map of NRs, and the area and number of NRs established in each region, as well as the degree of clustering, are studied using the grouping and sorting method. After that, the factors affecting the distribution of NRs are analyzed. For example, the effects of the natural environment and resource endowment on the distribution of NRs were assessed, suggesting the current dilemma of funding shortage faced by NRs [11]. Quantitative analysis of the NR distribution characteristics of NRs along the Yangtze River by region, province, and city revealed that spatial differences affect the balanced distribution of the number and area of reserves with three distinct geographical influencing factors [12]. The conservation cost is often explicitly defined, and its composition and calculation methodologies have also been established when analyzing conservation costs and benefits. For instance, the two major costs of protected areas nationwide, namely, management and opportunity costs, were evaluated by constructing a cost-accounting system in the system [13]. A targeted study on typical protected areas in Yunnan, China, was conducted by constructing a cost–benefit estimation and evaluation index system to estimate the cost of rural residents around protected areas with benefits [14]. In addition to the two main directions mentioned above, the correlation between economic growth and the construction of NRs in China was also explored, revealing a close relationship between the two factors [15].

The methodologies used in the studies on the disparity in income between urban and rural populations have been relatively mature and systematic. Briefly, the influencing factors accounting for the income gap between urban and rural residents were identified by revealing the relationship between the influencing factors and the income gap, based on which further policy measures were proposed in a targeted manner. Specifically, the urban and rural residents’ incomes are represented by urban residents’ disposable income and rural households’ net annual income per capita, respectively. The variable of urban–rural residents’ income gap is estimated using either their difference or ratio. While several studies have explored the potential effects of the digital economy [16], air pollution [17], and rural population transfer [18], no attempt has been made to evaluate the impact of the establishment of NRs on the urban–rural income gap. It has been contested whether conservation activities by NRs are beneficial or detrimental to those who live close to protected areas. For example, a study concentrating on the developing world demonstrated that local citizens may benefit from the creation of protected spaces, with overall poverty alleviation mainly through tourism [19]. Consistently, evidence from protected areas in Thailand suggested that districts with higher protected area coverage had higher consumption and lower poverty rates [20]. Both highland and lowland areas of Nepal have seen the benefits of NRs in terms of reducing overall and extreme poverty, which were more pronounced when a larger portion of the area was protected, with tourism as a major factor [21]. Nonetheless, several studies claimed that NRs may exacerbate local people’s poverty, as the protected areas can limit local populations’ access to natural resources like cropland, pastures, and timber supplies, which may impede regional economic development [22]. In the nature reserves of Qinling Mountain (China), local NR communities have lower income levels and higher rates of poverty than the national norm; it was noteworthy that the majority of the declines in household net income were brought about by the conversion of agriculture to conservation land [3]. The NRs are also barriers for nearby communities to support their livelihoods in Mikumi, Tanzania’s fourth largest national park, due to the increased land scarcity, population densities, and economic disparities. Given that the establishment of NRs has been demonstrated to affect the income of rural residents around the reserves, which is closely related to the income gap between urban and rural areas, it remains undetermined whether the establishment of NRs widens or narrows the rural–urban income gap. In contrast to studies using merely provincial- or city-level data to analyze the impact of the construction of protected areas and the urban–rural income gap, the county-level panel data applied in this study can facilitate the proposal of policy recommendations for the national government. A framework for evaluating the impact of the establishment of nature reserves on the urban–rural income gap is shown in Figure 1.

3. Methodology and Data

3.1. Methodology

A fixed-effects model was constructed to empirically analyze the impact of the establishment of NRs on the income gap between urban and rural residents through heterogeneity analysis comparatively at two levels [1]. The first level is a sub-regional comparison, with four regions (western, northeastern, eastern, and central) listed according to the location of the protected area were divided into. The second level is the comparison by the classification of NRs (national level, provincial level, city level, and county level). The model is as follows:

GAP_it = β0 + β1lnsquare_it + β2arg_it + β3ind_it + β4gov_it + β5des_it + α_i + ε_it

where GAP is the urban–rural income gap, lnsquare is the logarithmic value of the area of the NRs, arg is agricultural development, ind is the status of industrial development, gov is the fiscal policy, and des is the population density. Furthermore, i represents each district, t is the year, αi is the regional fixed effect, and εit is the disturbance term.

3.2. Data Collection

This study discusses the impact of the establishment of protected areas on the income gap between urban and rural residents from the perspective of counties. Specifically, the panel data from 2010 to 2018 were collected, in which the per capita disposable income of rural residents and urban residents at the county level was mainly derived from statistical yearbooks of relevant provinces. Missing data from the provincial statistical yearbook were supplemented with the statistical bulletins of each county and district. The data of other control variables were obtained from the China County Economic Statistical Yearbook. The relevant data of NRs were obtained from the National List of NRs. Here, the county-level panel data cover 1665 districts and/or counties in China.

3.3. Variable Selection

The explained variable in this study is the urban–rural income gap (GAP), which is expressed by the ratio of the per capita disposable income of urban residents to the per capita disposable income of rural residents [1]. The core explanatory variable of this study is the establishment of NRs, and the area of NRs is used to reflect the establishment situation. To alleviate the effect of heteroscedasticity, the logarithmic value (lnsquare) was taken for the area of NRs.

Four control variables were selected in this study: (1) agricultural development status (arg). Since farmers’ lives are closely related to agriculture, agricultural development is a major factor affecting farmers’ income. Here, the ratio of the added value of the primary industry to the gross regional product is adopted. (2) The state of industrial development (IND). With the acceleration of industrialization, a gap between the primary and secondary industries has been formed, resulting in a huge income gap between rural and urban residents. This study uses the ratio of the added value of the secondary industry to the gross regional product. (3) Fiscal policy (GOV). The central or local government policies on fiscal spending affect the secondary distribution of revenue, which in turn affects income disparity. Here, the ratio of local fiscal general budget expenditure to the gross regional product is applied. (4) Population density (DES). Population density is representative of regional human resources, known as an important factor for wealth creation and income disparity. Thus, this indicator is included as a control variable.

4. Results and Discussion

4.1. Characteristics of NRs and Urban–Rural Income Gap

From the 1950s to the 2010s, the number and area of protected areas have significantly increased, but the growth trend has tapered off since 2000 (Figure 2). In the early stage, the government introduced many policies to promote the establishment of NRs, whereas an emphasis was put on improving quality in the last decade.

NRs were mainly distributed in the eastern coastal regions of China, especially in the southeastern regions, though the areas are generally small (Figure 3). Overall, the number of NRs in China is evenly distributed, whereas the area of NRs is concentrated (Figure 3). A clear trend in the distribution of different levels of NRs is detected, where the national reserves are primarily distributed in the northwest and southeast regions. Furthermore, a small number of high-level NRs generally occupy a larger area in comparison with the low-level NRs. Concerning area distribution, many large NRs have been established in the western and northeastern regions, especially in provinces such as Xinjiang, Tibet, and Inner Mongolia, where many large NRs are distributed (Figure 3). With a low number of NRs, the area established in these provinces accounts for more than half of the country’s overall reserve area.

The urban–rural income gap is the key to reflecting the difference between urban and rural development. An urban–rural dual structure has been formed in China due to the specific institutional mechanism and the distinct characteristics in different stages, resulting in a considerable gap between urban and rural residents in terms of income, consumption, and public resources [16,17]. With the recent economic boom in China, the income of rural residents has increased, whereas the urban–rural income gap still exists [18]. In particular, the income of regional rural residents in the reserve areas, typically in remote areas, is generally lower in contrast to the urban residents (Figure 4).

4.2. The Relationship between NRs’ Establishment and Urban–Rural Income

The analysis of the impact of NRs establishment on urban–rural income revealed a remarked disparity based on full sample sets (

Table 1. Regression analysis results of the explanatory variables.

Variables	Gap (1)	Gap (2)	Rgap (2)
lnsquare	−0.0218 *** (0.00657)		−0.00742 *** (0.00136)
arg	2.183 *** (0.186)		0.765 *** (0.0301)
ind	0.581 *** (0.0784)		0.228 *** (0.0173)
gov	−1.158 *** (0.134)		−0.378 *** (0.0166)
des	−0.000285 * (0.000171)		−0.00015 *** (4.78 × 10−5)
L.lnsquare		−0.0174 *** (0.00359)
L.arg		2.038 *** (0.0862)
L.ind		0.59 *** (0.0501)
L.gov		−1.123 *** (0.0535)
L.des		−0.000159 (0.000125)
Constant	2.348 *** (0.0853)	2.208 *** (0.0514)	0.813 *** (0.0193)
Observations	9980	8156	9980
Number of id	1665	1363	1665
R-squared	0.129	0.127	0.128

Note: Robust standard errors in parentheses, *** p < 0.01, * p < 0.1.

). In particular, a significant reduction in the income gap was detected. Specifically, for every 1% increase in the area of NRs, the urban–rural income gap was narrowed by 0.022 units. This finding may be explained by the fact that the creation of NRs can also enable local farmers to develop ecotourism industries, such as creating farmhouses and homestays to boost income. Moreover, the rural residents near NRs can receive part of the ecological compensation, and the establishment of NRs can also enable some idle laborers to join the labor force and earn a living [19]. Nevertheless, the establishment of NRs may also restrict the use of some natural resources by surrounding rural residents, which may negatively affect this part of the income [20]. The income situation of rural residents is a critical aspect of the healthy growth of the entire economy and society because they make up a significant portion of the population. In this respect, the establishment of NRs demonstrated its economic value in alleviating the income gap. This observation may be due to the rise in rural inhabitants’ incomes, indicating that NRs, as a valuable and sustainable way to protect the environment and conserve biological resources, can undoubtedly aid China in its fight against poverty [1]. Two parameters, including agricultural and industrial development within control variables, were positively correlated with the urban–rural income gap, suggesting that a higher proportion of the output values of the primary and secondary industry may increase the urban–rural income gap. Contrarily, fiscal policy and population density were negatively correlated with the urban–rural income gap. It is inferred that the urban–rural gap can be relieved by the incremental proportion of local financial general budget expenditure to regional GDP and population density [6]. To the best of our knowledge, this is the first compressive study evaluating the effects of NRs’ establishment on the urban–rural income gap, and thus, a comparison between the present and other studies cannot be expected. However, Xu et al. [23] reported that NRs have a favorable impact on the rural residents’ income in China, which partially agrees with our findings, where the increased income is mostly the result of tourism development, facility improvements, and ecological service augmentation.

The fixed-effect model usually has a bias in the regression results due to endogenous problems, and thus, the stability test of the model was carried out using two approaches, including the lag of all explanatory variables by one period and the explanatory variables’ replacement. Since the lag of explanatory variables can effectively alleviate the problem of result bias caused by the endogeneity of the model, this study re-estimates the model by using the method of lagging all explanatory variables by one period (Table 1). After the first period of lag, the establishment of NRs still shows an imperative role in narrowing the income gap between urban and rural areas, which further verifies the stability of the current research conclusions. In the case of the explanatory variable replacement analysis, the per capita disposable income of urban residents and the per capita disposable income of rural residents were initially log-transformed, and then the difference recorded as RGAP was applied as a new explanatory variable for stability testing (Table 1). A discrepancy between RGAP and the baseline regression was not detected, which further verifies the stability of the present regression results.

4.3. Heterogeneity Caused by NRs

Given that the coastal areas are more economically developed than inland areas, the residents’ incomes are unevenly distributed in China, and the number of NRs varies from region to region (

Table 2. Regional regression analysis of the explanatory variables.

	Western	Northeastern	Eastern	Central
lnsquare	−0.0257 ***	−0.0431 **	−0.00667	−0.00569
	(0.00626)	(0.0167)	(0.00531)	(0.00662)
arg	1.816 ***	0.713 **	1.932 ***	4.256 ***
	(0.145)	(0.318)	(0.0935)	(0.190)
ind	0.567 ***	−0.276	0.810 ***	0.683 ***
	(0.0683)	(0.272)	(0.0616)	(0.104)
gov	−0.753 ***	−0.546 ***	−1.787 ***	−2.117 ***
	(0.0695)	(0.200)	(0.0753)	(0.100)
des	−0.000789 **	0.000894	0.000122	−3.51 × 10−6
	(0.000328)	(0.00142)	(0.000135)	(0.000182)
lnguo
lnqita
Constant	2.832 ***	2.345 ***	1.759 ***	1.985 ***
	(0.0752)	(0.242)	(0.0778)	(0.101)
Observations	3264	802	2452	3462
R-squared	0.106	0.028	0.331	0.257
Number of id	690	121	423	431

Note: Robust standard errors in parentheses, *** p < 0.01, ** p < 0.05.

). Thus, an investigation into the effects of the regional distribution of protected areas on the regression analysis is of importance. In the present study, the regression analysis was further conducted for four regions (the eastern, western, central, and northeastern regions) to evaluate the influence of NRs on the rural–urban income gap. The effect of NR on the income gap was also explored on both national and other levels.

Regarding regional heterogeneity, the establishment of NRs in the western region can remarkably reduce the income gap. Specifically, for the western regions, every one percentage point increase in the area of NRs is able to narrow the GAP by 0.026 units. This might be due to the enhanced income generated by rural residents in the western region through other forms of income, such as ecotourism and farmhouses [4,21]. Meanwhile, the income from ecological compensation is higher than the opportunity costs brought by the establishment of NRs. Among the four regions, the western reserves have the largest protected area, and thus, their effects on narrowing down the GAP are more evident than other geographical parts. A similar trend was also detected in the northeast region, where with every one percentage point increase in the area of NRs, the GAP was reduced by 0.043 units. However, the effect of NRs on reducing urban and rural income in the eastern and central regions was ambiguous since the NRs in the central and eastern regions are small. Furthermore, owing to a developed economy, the establishment of NRs in these areas cannot improve rural residents’ income significantly, with farmers bearing large opportunity costs. Moreover, western and northeastern China, with lower population densities than other parts of the country, also produce fewer cash crops [22], suggesting that the local population has few other means of income besides agriculture. However, owing to the established NRs, the government offers significant ecological compensation to create more job opportunities (e.g., forest rangers), and ecotourism is developed during the promotion of NRs [24,25]. Thus, the economic advantage of western NRs may raise the local rural citizens’ income levels and narrow the income gap [1,26]. On the contrary, with a developed economy and large cash crop output, the cost of land in eastern counties is comparatively high. In addition to agriculture, the inhabitants of these areas also derive their income from other sources. In such places, the cost of NRs is greater than the economic benefits of NRs [1,2,27]. In concordance with this, NRs located in central China, with a large population density, may impede local productivity. Therefore, a high opportunity cost of land conservation exists in places with a high demand for home development and a high population density. While the negative effects of NRs on the rural residents’ income in the western region, e.g., Qinling Mountain [3], the discrepancy might be due to the heterogeneity of NR types since NRs with wildlife played a limited role in promoting the development of tourism in contrast to natural parks [23].

In the case of hierarchical heterogeneity, the national level of NRs is a crucial factor in lowering the income gap between urban and rural areas, whereas the regression analysis for other levels of protected areas was not significant (

Table 3. Regression analysis of NRs at the national and other levels.

	National Level	Other Level
lnsquare	−0.0141 ***	−0.00183
	(0.00283)	(0.00178)
arg	2.151 ***	2.197 ***
	(0.0860)	(0.0858)
ind	0.569 ***	0.577 ***
	(0.0493)	(0.0494)
gov	−1.149 ***	−1.169 ***
	(0.0473)	(0.0473)
des	−0.000289 **	−0.000298 **
	(0.000136)	(0.000136)
Constant	2.270 ***	2.249 ***
	(0.0518)	(0.0520)
Observations	9980	9965
R-squared	0.128	0.125
Number of id	1665	1664

Note: Robust standard errors in parentheses, *** p < 0.01, ** p < 0.05.

). Consistent with this, the national NRs are generally larger and more well-known, contributing to a higher income obtained from ecotourism [5]. Furthermore, due to the higher priority that the Chinese government accords to national NRs, national NRs are subject to tougher management guidelines than NRs at lower levels [23]). For example, management institutions have been established at all national NRs, whereas this is not the case for numerous local NRs, particularly those at the county level. This indicates that China values national NRs more and has better control over them [28]. As a result, the government puts more investment in national reserves by providing stronger financial support and better facilities, and the ecological compensation received by nearby rural residents is higher. In addition, since the economic and tourism values are key factors included in the assessment criteria for upgrading from provincial to national NRs, the rural residents near national NRs can generally reap more economic rewards [29,30]. In accordance with this, national parks have been demonstrated to boost the income of rural communities [23].

4.4. Limitations of Methods and Future Improvement

In the present study, while efforts were made to reveal the relationship between NRs and the urban–rural income gap, the limitations in the research method warrant further improvement. First, the four explained variables chosen are singular, and thus, the development of other multidimensional parameters to quantify poverty and regional livelihoods would be valuable in further studies. Second, in addition to the hierarchy and geographical distribution, the types of NRs are also imperative factors influencing the residents’ income gap, e.g., the regional individuals’ income affected by desert-type and forest-type NRs may differ. Although these data are currently unavailable, the inclusion of heterogeneity of NR types is of importance. Third, the present study was confined to the counties with available economic data, and a few counties without accessible information were excluded, resulting in a rise in uncertainty. Fourth, it is recognized that national reserves may reduce the income gap for two reasons—they tend to be bigger and better in several respects, and they bring outside (i.e., national) investment into the region. However, the influence of these different forces was not distinguished in the current study.

4.5. Policy Recommendations

China’s present sustainable development goal is to strike a balance between biodiversity preservation and narrowing the rural–urban income gap, which calls for the coordination of economic growth and environmental protection. On this basis, four policy recommendations concerning the establishment of NRs have been put forward:

(1)

Governments at all levels are recommended to protect NRs from a legal perspective and promote the sustainable development of NRs. While this study demonstrated that the establishment of NRs may bring about economic benefits, certain NRs are now suffering from inadequate protection due to activities like poaching in animal sanctuaries and illegal logging in forestry reserves. The government is recommended to improve the corresponding laws and regulations to maintain the sustainable development of NRs. In addition, it is recommended to encourage the local rural population to pursue credentials after training and work as guards, maintenance workers, and repairers in protected areas to increase their income.

(2)

The government should formulate relevant fiscal policies and increase the fiscal expenditure of NRs that are small in scale and located in remote areas. A multitude of remote NRs struggle to survive due to a lack of funds; meanwhile, the low level and small scale of NRs located in remote mountainous areas often attract less financial expenditure from the government. Nonetheless, these reserves are often located in the western, northeastern, and other less economically developed regions, where the establishment of NRs can largely narrow the income gap. Hence, to effectively maintain their role, more government attention should be devoted to NRs in such areas by providing special allocations to avoid the lack of funds, incomplete staffing, aging facilities, inadequate maintenance, etc.

(3)

During the creation of NRs, it is essential to properly handle the resettlement of rural populations in the vicinity. In addition to agricultural cultivation, the farmers near these establishment areas lack other sources of income, especially in the western and northeastern regions with large areas of NRs. One of the government’s primary concerns is to ensure the settlement of rural residents who lost their farmlands. Meanwhile, handling these problems could alleviate the pressure on the income gap faced by the government. It is thus recommended to establish and improve the resettlement measures for farmers around the reserves, such as forming standardized, appropriate, and systematic resettlement rules and regulations. Moreover, the provision of the corresponding skills training and compensation for the occupied land may also benefit the surrounding farmers after the establishment of NRs.

(4)

Ecotourism should be developed near the national NRs in the western and northeastern regions. Furthermore, it is recommended to create corresponding tourism brands and build related tourism chains by combining local characteristics and rich biological resources and cooperating with major brands to develop tourism by-products. These measures are capable of increasing the part of fiscal revenue while increasing regional visibility. By running catering services and farmhouses, the government can help raise the income of adjacent rural inhabitants. While developing and utilizing protected areas, note that the original intention of establishing NRs is “protection” rather than “value-added”, and thus irreversible damage to NRs must be avoided.

5. Conclusions

Based on county-level panel data from 2010 to 2018, a systematic analysis of the impact of the establishment of NRs on the income gap between urban and rural areas was conducted. This study demonstrated that the establishment of NRs is conducive to narrowing the income gap, especially in western and northeastern regions, where its role in narrowing the income gap is more remarkable than that in the central and eastern areas. In contrast to other levels of natural reserves, the establishment of national-level reserves can reduce the residential income gap to a great extent. However, it cannot be denied that the current regression analysis may be affected by the parameter values in some counties and districts that are missing from China’s annual statistical bulletins, particularly the disposable income of urban residents. It is therefore recommended to figure out an alternative approach, either data collection from other sources or model estimation, to fill in the data gap in future studies.