Can Geographical Indicated Agricultural Product contribute to rural revitalization? Evidence of income gap reduction effects in Hubei, China

To bridge the uneven urban-rural development gap and to guide the rural eco-economy, China has implemented multiple supportive policies for agricultural counties since the 2000s. The Geographical Indicated Agricultural Product (GIAP) policy is a prime approach, which is a typical ecosystem service policy that endows eco-labels to authenticate agricultural goods’ eco-geographical characteristics. As these agricultural products primarily originated from rural areas, rural economic development may benefit from it. By indicating the urban-rural income gap with the Theil Index, this paper employs a range of multi-time-spot difference-in-differences models to examine the impact of the GIAP policy in Hubei, China. The findings show that: (1) Benchmark model makes clear that the GIAP policy has shrunken the urban-rural gap markedly, which is further reinforced by the robustness tests; (2) Heterogeneity tests reveal that rural areas have experienced income-boosting benefits from the GIAP policy while urban areas have not. (3) GIAP can even overcome traffic inconvenience, serve the interests of the regions that lack access to river transportation to some degree; (4) Policies interaction effects test reflects that blended measures, such as the Poverty-Stricken County Identification (PSCI) policy, can serve those regions to a greater extent. Finally, considering the common prosperity purpose and long-term viability of agricultural development, policy proposals are forwarded based on the conclusions.