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Does Land Rent between Acquaintances Deviate from the Reference Point? Evidence from Rural China

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  • Tongwei Qiu
  • Biliang Luo
  • Qinying He

Abstract

This paper theoretically and empirically investigates whether acquaintance networks influence the deviation of land rent from the reference point advanced by Hart and Moore. The coefficient of variance and the range of land rent are used to represent the degree of deviation from the reference point. Based on village‐level data from the 2015 China Household Finance Survey, the estimated results indicate that land rent between acquaintances is more likely to significantly deviate from the reference point. Although rental transactions are conducted between acquaintances, larger deviations from the reference are also associated with a longer time to close deals. Our analysis using household‐level data further supports our findings, indicating that land rental markets embedded in the acquaintance networks of rural China are in a transition period and have characteristics of both relational and market orientation. The policy makers should introduce more outer village lessees or other market ingredients to increase the voluntary marketization of land rentals inside acquaintance networks.

Suggested Citation

  • Tongwei Qiu & Biliang Luo & Qinying He, 2020. "Does Land Rent between Acquaintances Deviate from the Reference Point? Evidence from Rural China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 28(3), pages 29-50, May.
    • Handle: RePEc:bla:chinae:v:28:y:2020:i:3:p:29-50
    DOI: 10.1111/cwe.12331
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    References listed on IDEAS

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    4. Xin Deng & Miao Zeng & Dingde Xu & Yanbin Qi, 2020. "Does Social Capital Help to Reduce Farmland Abandonment? Evidence from Big Survey Data in Rural China," Land, MDPI, vol. 9(10), pages 1-17, September.
    5. Tongwei Qiu & Xinjie Shi & Biliang Luo, 2022. "Formalizing agricultural rentals in China: Does local public action help?," Development Policy Review, Overseas Development Institute, vol. 40(4), July.
    6. Tongwei Qiu & S. T. Boris Choy & Yifei Li & Biliang Luo & Jing Li, 2021. "Farmers' Exit from Land Operation in Rural China: Does the Price of Agricultural Mechanization Services Matter?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 29(2), pages 99-122, March.

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