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How did land titling affect China’s rural land rental market? Size, composition and efficiency

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  • Cheng, Wenli
  • Xu, Yuyun
  • Zhou, Nan
  • He, Zaizhong
  • Zhang, Longyao

Abstract

Based on 2010–2015 official surveys conducted by the Ministry of Agriculture, we apply the difference-in-differences method to study how the latest land titling reform in China affected the land rental market. While we cannot attribute the rapid growth of the land rental market during this period to the land titling reform, the reform did have a significant impact on the composition of renters and certain features of the rental transaction. Specifically, we show that the land titling reform led to an increase in land transferred to agricultural enterprises and cooperatives, and a decrease in the probability of households renting land out to other households (which were likely to be relatives and friends). The land titling reform also encouraged households to use written contracts and to charge pecuniary rents, although it did not affect the duration of the contract. Our results suggest that the land titling reform improved the efficiency of the land rental market by promoting the formalisation of rental contracts and by facilitating the allocation of land to more productive users.

Suggested Citation

  • Cheng, Wenli & Xu, Yuyun & Zhou, Nan & He, Zaizhong & Zhang, Longyao, 2019. "How did land titling affect China’s rural land rental market? Size, composition and efficiency," Land Use Policy, Elsevier, vol. 82(C), pages 609-619.
    • Handle: RePEc:eee:lauspo:v:82:y:2019:i:c:p:609-619
    DOI: 10.1016/j.landusepol.2018.12.037
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