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Allocative efficiency or misallocation of resources? The emergence of forestland rental markets and the forest devolution reform in China

Author

Listed:
  • Yuanyuan Yi
  • Fredrik Carlsson
  • Gunnar Köhlin
  • Jintao Xu

Abstract

This paper evaluates whether the devolution reform of forestland to household management improves allocative efficiency and household welfare through participation in forestland rental markets. Using a household panel dataset from three Chinese provinces, we find positive effects of the emerging forestland rental markets: with the reform, forestland was transferred to forestland-constrained and labour-rich households and households with higher levels of productivity in forestry. Participation in forestland rental markets increases household per-capita income and decreases the likelihood of income falling below the poverty line. We do not find any support for forestland captured by land-richer, wealthier, larger or powerful households.

Suggested Citation

  • Yuanyuan Yi & Fredrik Carlsson & Gunnar Köhlin & Jintao Xu, 2023. "Allocative efficiency or misallocation of resources? The emergence of forestland rental markets and the forest devolution reform in China," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 50(2), pages 395-420.
    • Handle: RePEc:oup:erevae:v:50:y:2023:i:2:p:395-420.
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    File URL: http://hdl.handle.net/10.1093/erae/jbac028
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