Using household survey data from rural China, economies of scale as measured by returns to scale and the effects of land fragmentation on crop outputs are examined. While these effects are found to be detrimental, statistically significant and substantial, existing economies of scale appear to be too small to suggest radical land policy changes in China.

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A new method is proposed to decompose inequality changes as measured by the Gini index 1 into structural e¡ects, real inequality e¡ects and interactive e¡ects. Application of the method to updated Chinese data reveals that structural e¡ects represent the driving force underlying the increasing trend in regional income inequality in rural China. Policy implications are explored. In addition to these contributions, considerable e¡orts are made to construct the income data used in the article. Pitfalls in measuring income inequality in rural China are discussed.

Primal panel data models of production risk are estimated, using more flexible specifications than has previously been the practice. Production risk has important implications for the analysis of technology adoption and technical efficiency, since risk averse producers will take into account both the mean and variance of output when ranking alternative technologies. Hence, one should estimate technical change separately for the deterministic part and the risk part of thetechnology.production risk, technical change, stochastic dominance, salmon aquaculture,