Impact mechanisms of the river rights to households reform in Lishui city on farmers' income and its policy implications

The property rights system for water resource assets is a crucial institutional safeguard for optimizing resource allocation and realizing the value of water-related ecological products. Based on county-level panel data from Zhejiang province (2010-2022) and using the river rights to households reform initiated in Lishui city in 2014 as a quasi-natural experiment for the reform of the property rights system for water resource assets, this paper empirically examines the impact mechanisms of this reform on farmers' income through Difference-in-Differences (DID) and mediating effect models. The findings revealed that: (1) Baseline regression results demonstrate that the river rights to households reform significantly promotes farmers' income. Compared to non-pilot areas, this policy increased rural per capita disposable income in pilot areas by 9.4%. This conclusion remains robust after undergoing a series of tests, including placebo tests, consideration of policy spillover effects, and exclusion of interference from other concurrent policies. (2) Mechanism analysis indicates that the reform primarily boosts farmers' income through promoting the development of advantageous industries, strengthening the rural collective economy, and attracting firm entry. Specifically, it develops competitive industries via ecological advantages, optimizes the benefit-linking mechanism of the rural collective economy to release dividends, and attracts firms to create employment opportunities for farmers and promote green county-level economic development. (3) Heterogeneity analysis reveals that the reform exerts significantly heterogeneous impacts on farmers' income. The income-boosting effect is more pronounced in regions characterized by lower terrain relief, gentler slopes, longer highway mileage, and better tourism public-service conditions. First, lower terrain relief facilitates tourism development, enabling the reform to more fully exert its income-enhancing effect. Second, better transportation in areas with longer highway mileage attracts visitor flow and promotes economies of scale. Finally, superior tourism public-service conditions are crucial for converting ecological resources into consumption. These research results provide empirical evidence for water resource asset property rights system reforms and offer policy insights for ecologically advantaged regions seeking to achieve common prosperity through ecological resource value transformation.