Assessing Income Heterogeneity from Farmer Participation in Sustainable Management of Forest Health Initiatives

Farmers’ participation in sustainable forest management plays a significant role in increasing their income and contributing to the comprehensive advancing of the rural revitalization strategy. This study focuses on farmers living near existing national forest health bases in Inner Mongolia. Using the endogenous switching regression model (ESRM), we empirically examine the income effects of farmers’ participation in sustainable forest management through employment and land leasing. The robustness of the model estimation is tested through various methods, including replacing the dependent variable. Furthermore, heterogeneity analysis is conducted using quantile regression. The results show the following: (1) Participation in sustainable forest management through employment (p < 0.001) and land leasing (p < 0.001) significantly increases annual household income by 4.28% and 1.44%, respectively. The income effect for farmers participating through employment is 2.84% higher than for those participating through land leasing. (2) For farmers who did not participate in sustainable forest management, the counterfactual scenario indicates a reduction in annual household income by 5.87% and 2.55%, respectively, highlighting a greater potential income improvement for non-participating farmers if they were to engage in sustainable forest management. (3) Heterogeneity analysis reveals that the income effects of the two participation forms vary across income levels. Employment participation in forest health bases has a more significant impact on low-income (QR_10) farmers, while land leasing participation has a greater impact on high-income (QR_90) farmers.