The purpose of this paper is to investigate empirically the effects of different dimensions of social capital on the well-being of farmers in China’s undeveloped poverty-stricken areas, and study the equivalent multiple of social capital and income compensation.
The paper opted for an exploratory study using the open-ended approach of grounded theory, including 1,176 interviews with rural households in poverty-stricken areas in China. The data were complemented by documentary analysis. Then an econometric model of social capital and farmers’ well-being was applied to the data.
The results show that the number frequently visiting relatives, reciprocity, participation and trust level are significantly positively related to the well-being of the farmers, and the level of participation in social capital requires the most income compensation, while the level of trust comes second.
This paper can serve as a template for developing a useful tool that can be fitted to national or regional data for studying the effects of social capital on the well-being of farmers in poor areas or countries and for calculating the concrete equivalent multiple of social capital and income compensation.
