Forest Therapy and Farmers' Income: Mechanisms and Effects

Haihua Lin^1,2Muhammad Umer Arshad³He Ma²Ya Tu²Qingfeng Bao^1*Jianru Zhang^2*Chen Xue¹Likun Zhao²Yatao Gao²Zhidong Feng⁴

• ¹College of Economics and Management, Inner Mongolia Agricultural University, Hohhot, China
• ²College of Agriculture, Medicine, Economics and Management, Inner Mongolia Open University, Hohhot, China
• ³University of Illinois Urbana-Champaign, Urbana, United States
• ⁴Faculty of Education, Shinawatra University,99 Moo 10, Bangtoey, Samkhok Pathumthani 12160, Bangkok, Thailand

Forest therapy represents a key component of China's ecological industry and plays a significant role in the rural revitalization strategy. Understanding the economic benefits accrued by local farmers through participation in forest therapy base development is essential for promoting sustainable rural development. Using survey data from 795 non-migrant farmers residing near forest therapy bases, this study examines the impact of forest therapy base development on household income, with distance to the bases serving as the instrumental variable. Control variables include individual characteristics, household attributes, farm types, and regional factors. The Endogenous Switching Regression Model (ESRM) is employed to estimate the causal impact of participation, while quantile regression is used to assess heterogeneity across participation types, farmer categories, and regions, followed by mechanism validation. The results reveal three key findings: (1) The Average Treatment Effect on the Treated (ATT) of employment participation is 0.3676, indicating a significant income boost for participating households. Compared to the counterfactual scenario, participation reduces income variability by 6.44%, suggesting higher and more stable household income, especially among new participants. (2) Heterogeneity analysis shows an inverted U-shaped impact: Forest therapy-based development participation most benefits middle-income farmers (QR_50). For agriculture-priority farmers, the impact is significant only among high-income groups (QR_75). Regionally, in western China, participation significantly raises income for low-income farmers (QR_25), while in eastern China, the largest gains are observed among middle (QR_50) and high-income (QR_75) farmers. Employment participation has a statistically significant effect on low-income (QR_25), middle-income (QR_50), and high-income (QR_75) households. In terms of the magnitude of the effect, government support has the strongest impact on low-income (QR_25) households. In the group with lower government support, employment participation has a significant effect on low-income (QR_25) and middle-income (QR_50) households, but the effect on high-income (QR_75) households is not significant. (3) Mechanism analysis indicates that both social network reinforcement (38.80% mediation) and ecological behavioral change (27.05% mediation) serve as significant partial mediators, the mechanisms of income enhancement operate through dual pathways.