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This is a thoroughly revised version of Harvard University Migration and Development Program Discussion Paper 45. Two anonymous referees provided very helpful comments and suggestions.

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Th e article investigates the major rural income diversifi cation patterns and their determinants in the context of China. Based on the data from a rural household survey, we fi rst categorize the rural income diversifi cation patterns according to the industry and the location in which the income is generated. Th en we apply a Bayesian multinomial probit model to examine the determinants of various types of the rural income diversifi cation. Th e major results demonstrate that a larger family size stimulates households to undertake various income diversifi cation patterns, but its eff ects are discounted by an unproductive population structure within the household. Another interesting discovery is that a rural household chooses its income diversifi cation pattern by referring to the surrounding neighbourhood; when most farm families depend on off-farm activities to boost their income, the individual household is more likely to follow the surrounding households by participating in the off-farm or mixed income activities or to migrate out to earn its income.