(industrial) sector growth. When unearned incomes are separated from earned incomes, the growth elasticity of unearned incomes tends to be higher than that of earned incomes. This question needs to be investigated further and with much care in future studies. We must conclude that our analysis based on the estimation of sectoral growth elasticity of poverty reduction has thus far produced relatively little guidance in terms of how the extended CARP should be targeted. Nevertheless, our results based on the nationwide provincial data are generally consistent with the conclusions based on the detailed villagelevel studies obtained from a small number of villages. Non-agricultural income growth has tended to have a larger impact on rural poverty reduction than agricultural income growth. Furthermore, it may be arguable that targeting land reform implementation to areas with relatively higher shares of agricultural incomes might be worth consideration. Such a targeting strategy could have some potential advantages. Obviously, the higher income share from agriculture would ensure larger impacts on poverty reduction (i.e., larger ‘unconditional’ growth elasticity) given the same rate of agricultural income growth. In addition, such areas are likely to be the areas relatively remote from urbanized areas. Since there is a tendency (although weak) that the Ď€ coefficients could be higher in less urbanized areas, such areas are likely to have relatively higher elasticities of agricultural growth. A simple diagram as shown in Figure 7-1 is consistent with the series of regression results as reported earlier. Only slightly negative correlation is observed between the rate of change in poverty incidence and the difference in the growth rates between non-agricultural and agricultural incomes (i.e., non-agriculture income growth less agricultural income growth). Those regression results of the relationship between sectoral income growth and the changes in poverty, however, are the average relationship across provinces. There is, in fact, a great deal of variations across provinces in income growth and in poverty reduction performances. Based on the provincial panel data between 1991 and 2006, for example, the headcount poverty ratio declined in a majority of the provincial 3-year growth spells (221 out of 365 province-growth spells), but it increased in 152 provincial growth spells. During the same period, the growth rate in the non-agricultural income was higher in 235 out of 365 provincegrowth spells while that of the agricultural income was higher in 130 province-growth spells. As shown also in Tables 7-4 and 7-5, in most (58) of the 62 provinces where poverty incidence declined between 1991 and 2006, non-agricultural incomes grew faster than did agricultural incomes. Although growth in non-agricultural income was higher than that of agricultural income and poverty incidence fell in majority of the provinces, there is also a sizable number of provinces where different patterns are observed.
IV. Rural Poverty and CARP Extension: Tentative Conclusions In looking forward, how should the extended CARP be possibly targeted? The empirical evidence examined in this chapter and chapters 3 and 4 collectively suggests that CARP did have positive welfare impact on the rural poor over the past two decades. Given the data limitations, however, it is difficult to infer the quantitative magnitudes of such impacts. Nevertheless, it would be safe to conclude that while CARP impact on the rural poor might
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