Abstract: [Objective] The objective of investigating the effect of the sloping land conversion program (SLCP) on rural households’ income inequality is to verify the process of the SLCP, and some policy implications are considered for the next stage of the SLCP. [Method]Total income decision equations were built using unique panel dataset of 1 158 sample rural households from 15 counties in 5 provinces and 1 region to consider the marginal and the overall effects. The effect of the SLCP on rural households’ total income was estimated with Shapley value decomposition approach by GINI coefficient, Theil-L coefficient and Theil-T coefficient. [Result]The empirical results indicated that the overall effect and marginal effect of the SLCP on rural households’ total income were positive and significant at 0.01 statistical level. The contribution of the SLCP to GINI coefficients of both the overall effect and marginal effect of rural households’ income inequality had been rising, and then declining from 1999 to 2012. The contributions in 2008 of both the overall effect and marginal effect were the highest with 3.04% and 4.55%, respectively. Both Theil-L coefficient and Theil-T coefficient informed us the similar consequences.[Conclusion] The implementation of the SLCP increased the sample rural households’ income, and also caused their income disparity. Therefore, attentions should be paid to the impact of the ecological restoration programs on the income inequality of rural households. Multi-win policies should be designed to tackle the matter for ecological restoration to raise rural households’ income and reduce income equality.

Key words: the sloping land conversion program, income inequality, total income decision equation, the Shapley value decomposition