Land transfer in rural China: incentives, influencing factors and income effects

ABSTRACT

Land transfer incentives and their effect on farmers’ income in developing countries have been widely examined in the literate, but little is known about the driving mechanism of rural household income effect during land transfer. To fill in this gap, this paper explains the incentives of land transfer, analyses the influencing factors of farmers’ decision on land transfer, then measures the income effects of land transfer and identifies the main sources of income effects, utilizing open-access data collected through the China Family Panel Studies. The empirical results show that land flow out or in is beneficial to raise farmers’ income, indicating that the income effects have a positive feedback to farmers’ decision on land transfer. Further analyses reveal that land flow-out farmers and land flow-in farmers have different main sources of income growth. Our finding suggest that optimizing the incentive role of China’s existing rural land property system can help orderly flow of rural land resources, which subsequently increases rural household income.

KEYWORDS:

• Land transfer
• income effect
• propensity score matching
• land property system
• rural China

JEL CLASSIFICATION:

• Q15
• Q13

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ Securities daily, bureau of statistics: the transfer area of household contracted farmland exceeds 530 million mu (1 mu = 1/15 hectare), 2019-08-05, http://news.10jqka.com.cn/20190805/c613000739.shtml.

² Please refer to http://isss.pky.edu.cn/cfps/download/login for more information about the CFPS data.

Additional information

Funding

This paper is supported by the National Natural Science Foundation of China [Grant No. 71973050] and the Ministy of Education in China Project of Humanities and Social Science [Grant No.17YJA630075].