This paper presents empirical evidence of the effects of the Grassland Ecological Compensation Policy (GECP) in China on grassland quality and herder income. Using econometric analysis of remote sensing and household survey data, the study finds that GECP improves grassland quality (to a small extent) and significantly increases herder income, but also exacerbates income inequality. The program induced changes in herders' livestock production behavior, highlighting the importance of flexible and locally adapted programs.
