Abstract
Under the conceptual framework of China’s rural revitalization strategy and sustainable development vision, this study aims to perform a quantitative analysis of the general impact of engagement with circular agriculture practices on sustainable livelihoods. In this study, which is based on data from the 2020 round of the China Family Panel Studies (CFPS) survey that covers 856 rural households from five provinces, endogenous switching regression and mediation analysis are used to explore two transmission mechanisms: resource efficiency and income diversification. The results suggest that engaging in circular agriculture is associated with an Average Treatment Effect on the Treated (ATT) of 0.078, which is a 16.8% increase over the counterfactual mean. The mediation analysis suggests that income diversification is a mediator that explains 25.6% of the total effect, while resource efficiency is a mediator that explains 17.9% through input cost savings. The analysis also suggests that larger farms benefit more from engaging in circular agriculture (ATT = 0.098), while those with higher educational attainment (ATT = 0.094) and those from eastern provinces (ATT = 0.089) also benefit more from engaging in circular agriculture. However, those with lower initial livelihood levels benefit more from engaging in circular agriculture, which suggests an equalizing effect.